Zinc settled up 0.4% at 124.05 as support seen that global shortage remained on the spotlight. According to the latest ILZSG data, global market was in deficit of 17k tonnes in the Q1 of the year. Adding to signs of solid demand, LME inventories continued to dwindle. Stocks on the LME dropped almost 35% year-to-date. Also Last Friday, the US nonfarm payroll figure beat expectations, rising by 217,000, and the unemployment rate remained at its lowest since September 2008 of 6.3%, hovering below 7% for seven months in a row. These upbeat economic reports gave a fillip to market confidence, driving US stock prices up. Commodity market also gained traction to rally. The rating agency S&P’s announced that it may raise the long-term rating for the US to “AAA” if it sees “additional evidence of bipartisan efforts that signal a lower degree of political brinksmanship around fiscal policy decisions, coupled with a general government debt burden decline more pronounced than we currently expect.” In China, the General Administration of Customs reported that the country’s trade surplus rose for a third month straight in May to USD 35.92 billion. Exports rose, but imports staged an unexpected drop, in a sign of sluggish demand from domestic markets. China imported 380k mt of copper and copper semis in May, down 15.6% from April, but up 5.9% from a year ago. Technically market is under short covering as market has witnessed drop in open interest by -9.41% to settled at 1771 while prices up 0.5 rupee, now Zinc is getting support at 122.5 and below same could see a test of 121 level, And resistance is now likely to be seen at 124.9, a move above could see prices testing 125.8.

Trading Ideas:

Zinc trading range for the day is 121-125.8.

Zinc ended with gains as support seen that global shortage remained on the spotlight.

China Zinc Output Up 2.01% in April, with Higher Output Expected in May

Zinc weekly stocks at Shanghai exchange came up by 1571 tonnes.