Zinc settled up 1.43% at 124.35 recovered on Friday, as buying picked up a day after prices hit their lowest in 1-1/2 months, but the metal still fell for a third straight week due to concerns over demand and a probe into metals financing in China. While China's industry output in May was positive, boosting market confidence. LME zinc prices opened at USD 2,077/mt overnight, then rose slightly to USD 2,090/mt, touching an intraday high of USD 2,096/mt. But euro zone trade data in April, US May PPI and University of Michigan's June CCI all fell far short of expectations, weighing down the market. LME zinc prices fluctuated between USD 2,075-2,085/mt, and closed at USD 2,086.25/mt, up USD 10.25/mt or 0.49%. Trading volumes decreased by 2,809 lots to 8,223 lots, and total positions increased 2,452 lots, to 323,528 lots. LME zinc inventories fell by 2,650 mt to 684,625 mt. Investors are likely to monitor economic data from China closely to gauge the health of the world's top copper consumer as the economy has had a soft start to the year. LME inventories dropped more than 35% year-to-date, while global markets recorded a 17,000 deficit in 2013, according to the ILSZG report. The Chinese economy showed some signs of stabilising in May as the government unveiled more stimulus measures, but signs of further deterioration in the property market indicate more policy support may be needed. Technically market is under short covering as market has witnessed drop in open interest by -24.11% to settled at 1709 while prices up 1.75 rupee, now Zinc is getting support at 123.4 and below same could see a test of 122.5 level, And resistance is now likely to be seen at 124.8, a move above could see prices testing 125.3.

Trading Ideas:

Zinc trading range for the day is 122.5-125.3.

Zinc ended with gains as China's industry output in May was positive, boosting market confidence.

But euro zone trade data in April, US May PPI and University of Michigan's June CCI all fell far short of expectations, limiting upside.

Zinc weekly stocks at Shanghai exchange came down by 2296 tonnes.