Zinc on MCX settled up 2.66% at 193.05 boosted by a drop in inventories. Zinc has gained 10 percent this year on concerns that the closure and suspensions of big mines will create shortages. LME zinc climbed 2.6 percent to end open outcry trading at $2,884 after LME data showed on-warrant inventories, those not earmarked for shipment from warehouses and therefore available to investors -- slid 11 percent to 258,050 tonnes, the lowest since January 2009. Zinc hit a record shortage in 2016. According to the International Lead and Zinc Study Group, zinc registered a deficit of 286,000 metric tons last year. Global usage of refined zinc metal rose 3.6% while supply remained pretty much flat thanks to a number of mine shutdowns. The tightening in zinc’s raw material segment accelerated last year thanks to the closure of big mines such as Century, Lisheen and Glencore‘s suspension of 500,000 mt of annual mine capacity. These closures have impacted the supply of mine concentrates drastically and, for the first time, we are seeing an impact in the refined metal market. In February, Korea Zinc Co. announced it will reduce its refined zinc output by 7.7% (or 50,000 mt) this year. The company attributed its decision to tight supplies of mined concentrate and the accompanying reduction in treatment charges, which have plummeted to multiyear lows. Technically market is under fresh buying as market has witnessed gain in open interest by 10.16% to settled at 6807 while prices up 5 rupees, now Zinc is getting support at 188.4 and below same could see a test of 183.8 level, And resistance is now likely to be seen at 195.5, a move above could see prices testing 198.

Trading Ideas

# Zinc trading range for the day is 183.8-198.

# Zinc prices ended with gains boosted by a drop in inventories.

# Korea Zinc saying it will cut refined zinc production by 7.7 percent, or around 50,000 tonnes, to 600,000 tonnes this year.

# Outside of China mine supply of zinc fell by 10 percent last year, according to the International Lead and Zinc Study Group (ILZSG).