Zinc yesterday settled up by 0.54% at 281 as demand prospects brightened after top consumer China reopened its borders. A raft of policy measures from Beijing to revive its economy and its ailing property sector have boosted investor sentiment, although spot demand for the metal has been limited ahead of the Lunar New Year starting from Jan. 21. On the supply side, inventories remain at record lows as the power crisis in Europe forced several smelters to operate at reduced capacity, while others were placed on care and maintenance, including the Budel smelter in the Netherlands, the Nordenham smelter in Germany, and the Auby smelter in France.
In China, zinc inventories in Shanghai Futures Exchange warehouses rose by 2,280 tonnes to 20,453 tonnes on December 30th. As China's new year holiday approaches, market activity slows down, and the domestic stock accumulates. Global zinc stocks closed in 2022 at 42,825 tonnes, an 84.7% reduction from the beginning of the year. Investors now await U.S. inflation data later this week for more clues on whether the Federal Reserve will, as some traders expect, take a less aggressive stance on monetary policy.
Technically market is under fresh buying as the market has witnessed a gain in open interest by 11.8% to settle at 1971 while prices are up 1.5 rupees, now Zinc is getting support at 278.9 and below same could see a test of 276.6 levels, and resistance is now likely to be seen at 282.6, a move above could see prices testing 284.
Trading Ideas:
# Zinc trading range for the day is 276.6-284.
# Zinc prices rose as demand prospects brightened after China reopened its borders.
# Global zinc stocks closed 2022 at 42,825 tonnes, an 84.7% reduction from the beginning of the year.
# Inventories remain at record lows as the power crisis in Europe forced several smelters to operate at reduced capacity.
