Zinc on MCX settled down -1.58% at 162.05 on profit booking after prices gained recently on supply concerns after Glencore shuttered its Black Star mine in Australia. Zinc has been the top LME performer this year, with gains of more than 50 percent on worries about shortages developing after mine closures and suspensions. The ILZSG group continues to anticipate that the supply of refined zinc metal will be constrained by a sharp reduction in the availability of zinc concentrates and that global usage in 2016 will exceed production by 349,000 metric tons resulting in a further drawdown of both reported and unreported stocks. In 2017, the market is expected to remain in deficit with the extent of the shortage forecast at 248,000 mt. Over the past few weeks, zinc struggled to build on gains, resting at $2,400/mt, a level from where investors stopped chasing prices higher in previous years. Glencore closed another lead-zinc mine on Monday as reserves exhausted, according to sources. The mine was put into production in 2014, and had serviced for 13 years. It produced 40 million tonnes of ore, with 1.75 million tonnes of zinc and nearly 1 million tonnes of lead. Stemming further losses for copper was China's official Purchasing Managers' Index (PMI) for October, which expanded at the fastest pace in more than two years, adding to the view that a credit and housing boom is stabilising the world's second-largest economy. Technically market is under long liquidation as market has witnessed drop in open interest by -12.91% to settled at 14188 while prices down -2.6 rupee, now Zinc is getting support at 161.3 and below same could see a test of 160.3 level, And resistance is now likely to be seen at 163.4, a move above could see prices testing 164.5.

Trading Ideas:

Zinc trading range for the day is 160.3-164.5.

Zinc dropped on profit booking after prices gained recently on supply concerns after Glencore shuttered its Black Star mine in Australia.

The ILZSG group continues to anticipate that the supply of refined zinc metal will be constrained by a sharp reduction in availability of zinc.

In 2017, the market is expected to remain in deficit with the extent of the shortage forecast at 248,000 mt.