Zinc settled flat at 143.95 as macroeconomic news released yesterday was mixed, with zinc prices continuing to see pressure. Market concerns over China's credit market grew due to Tianlian Group's debt default, and Europe's July CCI remained sluggish. In addition, the numbers of US initial jobless claims last week and continued jobless claims rose, adding to market uncertainty toward US economic recovery and distressing market sentiment. Eurozone unemployment rate fell in June to 11.5%, a low not seen since September 2012, while the unemployment rate in 28 European Union member states also dipped to 10.2%, hitting a refreshed low since March 2012. The flash Eurozone CPI dropped further to 0.4% in July, its lowest level since 2009. US initial jobless claims for the week ending July 25 came in at 302,000, higher than the expected 300,000. Chicago’s manufacturing PMI was reported at only 52.6, well below the estimated 63. Meanwhile, Argentina has defaulted on its debts for the second time in more than 12 years after failing to strike a deal with the holdout hedge funds. LME zinc prices opened at USD 2,382/mt, dipping to USD 2,342.75/mt, and closing at USD 2,359.75/mt, down USD 22.25/mt or 0.93%. LME zinc inventories have grown by 7,375 mt, but backwardation on the LME reached as high as USD 18/mt this week, which will give support to zinc prices. Technically market is under fresh selling as market has witnessed gain in open interest by 32.19% to settled at 7178 while prices down -0.05 rupee, now Zinc is getting support at 142.8 and below same could see a test of 141.6 level, And resistance is now likely to be seen at 144.9, a move above could see prices testing 145.8.

Trading Ideas:

Zinc trading range for the day is 141.6-145.8.

Zinc settled flat as macroeconomic news released yesterday was mixed, with zinc prices continuing to see pressure.

The US ISM manufacturing index fell from June’s 62.6 to 52.6 in July, well below forecast.

Zinc daily stocks at Shanghai exchange came down by 51 tonnes.