Zinc settled up 1.84% at 124.85 as prices witness some support pertaining to signs of solid demand. Last year, global markets unexpectedly swung to a deficit, while stocks at the LME continued to decline. Now LME storage is down almost 30% year-to-date. LME Zinc was at $2,085 was $22 higher as inventories fell 2,650 tonnes to a two-month low of 755,325 tonnes. The market lacked solid economic news overnight, and continued to absorbing slightly stimulus policies from China. When combined with the entrance of investors into the market, LME zinc prices opened at USD 2,067/mt, then climbed to USD 2,103/mt, and closing at USD 2,092/mt, up by 1.42%. While US CPI rose 2.1% YoY in April, up from the 1.4% in March and well above the expected 1.7%. In Germany, the Harmonized Index of Consumer Price fell by 0.3% in April and advanced by 1.1% YoY, in line with economists’ forecasts. The euro zone industrial output declined 0.3% MoM in March. In the UK, the number of the unemployed in April dropped 12,100 from March, exceeding forecasts, and the ILO Unemployment Rate for the first quarter was down to 6.8%. Also China’s Premier Li Keqiang said at a conference May 14 that the central government should accelerate the program for replacing business tax with VAT, extending the tax reform into service sectors to create jobs and help restructure China’s economy. Technically market is under fresh buying as market has witnessed gain in open interest by 12.1% to settled at 1936 while prices up 2.25 rupee, now Zinc is getting support at 123.7 and below same could see a test of 122.4 level, And resistance is now likely to be seen at 125.7, a move above could see prices testing 126.4.

Trading Ideas:

Zinc trading range for the day is 122.4-126.4.

Zinc gained amid speculation demand from top consumer China will increase in the near-term.

In China, calls for additional pro-growth measures were on the rise following poorer-than-expected economic data for April.

The US CPI rose 2.1% YoY in April, up from the 1.4% in March and well above the 1.7% expected.