Zinc settled up 0.73% at 123.35 rose tracking gains on LME, rebounding from the longest losing streak in 25 years, on speculation that strengthening demand in China will curb supplies. Mitsui Mining & Smelting Co., Japan's top zinc producer, raised annual charges to overseas buyers by as much as 70 percent amid rising Chinese consumption, compared with a 15 percent gain last year. China's imports of zinc concentrate climbed 24 percent in December from a year earlier, customs data show. A global production deficit will widen this year to 120,000 metric tons, from 20,000 tons in 2013, Morgan Stanley said in a Jan. 22 report, forecasting a 10 percent gain in the average cash price. Zinc stockpiles at warehouses monitored by the London Metal Exchange shrank 30 percent the past 12 months. Zinc for delivery in three months climbed 0.8 percent to settle at $1,968 a ton. Markets in China are closed through tomorrow for the Lunar New Year holiday. In US economic data on Wednesday also provided some support to the market, showing growth picked up in the dominant US service sector in January. Also recent soft Chinese factory data has prompted caution about the outlook for economic growth and demand for metals. Technically market is under fresh buying as market has witnessed gain in open interest by 1.53% to settled at 2061 while prices up 0.9 rupee, now Zinc is getting support at 122.7 and below same could see a test of 122 level, And resistance is now likely to be seen at 124, a move above could see prices testing 124.6.

Trading Ideas:

Zinc trading range for the day is 122-124.6.

Zinc ended higher on speculation that strengthening demand in China will curb supplies.

A separate report showed growth in U. S. services sector quickened to a four-month high in January and hiring remained robust.

Mitsui Mining & Smelting Co., raised annual charges to overseas buyers by as much as 70 percent amid rising Chinese consumption.