The price of zinc yesterday increased by 0.67% to 234.1 because the International Lead and Zinc Study Group (ILZSG) predicted that the global market for refined zinc will likely have a deficit in 2023. The ILZSG predicted that in 2023, there will be a shortage of only 45,000 tonnes, as the demand for refined zinc metal will outpace supply. According to data, as of April 28, social inventories of zinc ingots across seven important Chinese marketplaces were 114,900 mt, down 21,600 mt from Monday, April 24, and 21,800 mt from the previous week.
The decline in zinc prices in Shanghai increased downstream customers’ desire to buy as well as their need to restock, which led to a rapid decline in Shanghai’s inventory. The daily outflow from warehouses in Guangdong remained constant at 1,500 mt despite a minor decline in market arrivals, which caused a sharp decline in local inventory.
Despite the increasing influx of visitors, downstream demand increased in Tianjin. As a result, there was a strong desire to sell and a flurry of market activity, which caused Tianjin’s inventory to decline. Overall, inventory decreased by 21,600 mt across China’s seven largest markets, including Shanghai, Guangdong, and Tianjin, and by 19,500 mt overall.
Technically, the market is under short covering as open interest decreased by -8.91% to settle at 3689 while prices increased by 1.55 rupees. Currently, Zinc is receiving support at 232, and a move below that level could result in a test of 229.8 levels. Resistance is now anticipated to be seen at 235.9, and a move above could result in a test of 237.6 levels.