Zinc intraday

MCX Zinc June registered days high near 84.30 and closed with minor loss at 82.30, Intra day low registered near 81.55

LME zinc may not get significant upside in next 12 months, although prices will likely be volatile because of large short position in LME zinc futures.

Global concentrate supply not tight enough to restrain zinc output for next 6-12 months, which should lead to a growing surplus in zinc market, possibly push prices to test $1,700-$1,800/ton.

Prices could rally short-term if low prices forces mine closures, but producers would likely hedge into any price strength. However, says this period of low prices would likely restrain growth in Chinese zinc mine output in 2009, significantly tightening concentrate market, while major mines expected to end their lives or mine lower ore grades in 2010-2011.

Zinc price falls during the next 12 months, the more it could bring forward the next cyclical boom phase in the market.

Zinc inventories at LME, increased by -750 MT to 151050 MT.

MCX Zinc June - Technical Outlook:

The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.

Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 81.1 levels. If broken can see further fall to 80.0 and 78.4, If market holds above 82.7 further rally can be seen towards 83.9 and 85.5

Recommendations- MCX Zinc June: Sell at 82.50-83.00 Target 81.60 and 80.60 SL 83.90


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