Zinc settled down -1.69% at 130.80 on profit booking while overall outlook remain firm and bullish as combination of rising global Zinc demand along with supply shortfalls due to closures of some major Zinc operations in 2013 and 2014 is expected to create a supply deficit in the Zinc market and therefore, Zinc prices would remain strong in the year 2014. During Jan-Oct'13 period, Zinc refined production have increased by almost 6 percent, while Zinc consumption have increased by 7 percent as compared to last year indicating that the surplus will slowly turn into deficit in the coming year. During the last three months, we have seen an encouraging global economic recovery in the major consuming regions like China, India & other emerging economies followed by a recovery in the US which makes us believe the demand for Zinc is expected to put upward pressure on global Zinc prices. Also, with the on-going monetary easing in US, Europe and Japan is helping the economy to grow at a stable pace. Going forward we feel that due to the enormous infrastructure spending by China and a recovering US economy may provide further demand support for the metal. Support is also seen as the number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly a month, a hopeful sign for the labor market. Technically market is under long liquidation as market has witnessed drop in open interest by -6.89% to settled at 4259 while prices down -2.25 rupee, now Zinc is getting support at 128.4 and below same could see a test of 125.8 level, And resistance is now likely to be seen at 133.6, a move above could see prices testing 136.2.

Trading Ideas:

Zinc trading range for the day is 125.8-136.2.

Zinc ended with losses on profit booking after prices rose in last some sessions due to supply concerns

The number of US initial jobless claims released overnight topped expectations and hit a one-year high

Zinc daily stocks at Shanghai exchange came down by 680 tonnes