Zinc settled down -0.47% at 138.20 as concerns over the property market triggered in the market also, escalating geopolitical turmoil and downbeat Michigan's June CCI depressed market sentiment. Meanwhile support is expected as 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. MMG, the Hong Kong-listed offshore arm of China's state-owned Minmetals Corp, cut on Thursday its 2014 output target to between 575,000 and 600,000 tonnes of zinc in concentrate from 600,000-625,000, following an underperforming second quarter at the Century mine.

The global zinc market fell into a 194,000 tonne deficit in the five months to May 31, according to industry tracker International Lead and Zinc Study Group. That is more than 10 times the deficit recorded in the first 11 months of 2013. Technically market is under long liquidation as market has witnessed drop in open interest by -2.3% to settled at 6594 while prices down -0.65 rupee, now Zinc is getting support at 137.6 and below same could see a test of 136.8 level, And resistance is now likely to be seen at 139, a move above could see prices testing 139.6.

Trading Ideas:

Zinc trading range for the day is 136.8-139.6.

Zinc dropped as escalating geopolitical turmoil and downbeat Michigan's June CCI depressed market sentiment.

The global zinc market fell into a 194,000 tonne deficit in the five months to May 31 – ILZSG

Zinc weekly stocks at Shanghai exchange came up by 132 tonnes.