Zinc settled up 1.17% at 138.85 after teh report that China MMG lowered zinc output target for 2014, saying its Century mine will be closed after running out of resources in 2015. When combined with continuously falling LME zinc inventories, zinc prices gained ground. LME zinc prices which opened at USD 2,294/mt, and edged up to USD 2,300/mt, and closing at USD 2,307.75/mt, up by +0.85%. China's MMG Ltd cut its 2014 zinc output target and said mounting supply concerns, heightened by the pending closure of its key Century mine in Australia, were driving world prices of the rust-inhibiting material higher.

The mine, one of world's biggest sources of zinc, is set to run dry next year, removing close to a half-million tonnes of the metal from the 13-million-tonne global market. That has helped spark a rush among firms such as Glencore and Nyrstar to find new zinc deposits to feed rising demand from China which is buying the metal to rust-proof new cars and coat steel. London Metal Exchange three-month zinc traded at its highest price in almost three years this week. Prices have climbed 20 percent since late March.

US housing starts fell to 893,000 in June on an annually adjusted basis, down for the second month to a low last seen in September 2013 and missing market expectations. The country’s June building permits also dwindled to 963,000, the lowest level since January. These negative housing data suggest that the US property market is still confronted with headwinds. Technically market is under fresh buying and getting support at 137.4 and below same could see a test of 136 level, And resistance is now likely to be seen at 139.6, a move above could see prices testing 140.4.

Trading Ideas:

Zinc trading range for the day is 136-140.4.

Zinc gained after China MMG lowered zinc output target for 2014, saying its Century mine will be closed after running out of resources in 2015.

When combined with continuously falling LME zinc inventories, LME zinc prices gained ground.

Zinc daily stocks at Shanghai exchange came down by 373 tonnes.