MCX Zinc June trades negative following a sell in other metals

18 June 2008 09:50:43

MCX Zinc June traded negative following a sell in other metals at LME, Zinc closed near 80.05 with minor loss after registering days low near 79.60. Intra day high registered near 81.20.

LME zinc has further to fall, with a big increase in mine output facilitating strong metal production despite a small concentrate bottleneck.

Small Chinese miners are feeling the pinch from low prices, the bank notes, and the cost support level for zinc will depend on the volume of mine supply that can be removed before it begins to constrain metal output.

But given the large volume of non-Chinese mine supply about to come to market, the cost support level for zinc is still a few hundred dollars away yet.

OZ Minerals Ltd., the world's second- largest zinc mining company to be formed by Oxiana Ltd.'s takeover of Zinifex Ltd., expects prices of the metal to rebound from 2010 as supplies from mines dwindle.

Zinc inventories at LME, decreased by 175 MT to 143800 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 79.4 levels. If broken can see further fall to 78.7 and 77.8, If market holds above 80.3 further rally can be seen towards 81.0 and 81.9

Recommendations- MCX Zinc June: Sell at 81 Target 79.60 and 78 SL 81.80

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