Zinc prices rose to Rs 232.10 per kg as participants rolled over their long position, according to the open interest. The base metal traded positive after a gap tracked the weaker dollar.
In the above-mentioned period, zinc increased by over 9 percent and 10 percent for the MCX & LME. Galvanizing metal prices rose on May 21 amid concerns about a possible shortage in world markets amid a recovery in the world economy. The US dollar index was lower at 89.92, down 0.30 percent against major currencies.
Yash Sawant, Research Associate at Angel Broking Ltd, said, “Zinc prices rose as an increase in taxes on mining companies in major zinc and copper producing countries, Peru and Chile, could cut production. Increasing bets on a low interest rate environment over a longer period of time, despite the recent recovery in the global economy, which rekindled inflation worries, kept the US currency under control, which continued to support industrial metals with dollar prices. “
Zinc treatment costs, which had risen to a decade high in 2020 ($ 299.75 per tonne), fell to $ 159 per tonne in 2021 due to lack of concentrate supplies from global mines.
However, gains for zinc have been capped in the earlier months as there appeared to be no apparent shortage in global markets for refined zinc despite the decline in mine supplies. According to reports from the International Lead and Zinc Study Group (ILZSG), global production of refined zinc rose 1.2 percent, ending with an estimated surplus of 533,000 tons. Even the zinc stocks in the warehouse monitored by LME rose by over 40 percent in 2021 (since the beginning of the year). The excessive surplus in the physical market and hidden supplies of zinc held back galvanizing metal prices, Sawant added.
The non-ferrous metal traded on the daily chart with a moving average of more than 50, 100 and 200 days, but with a moving average of less than 5 and 20 days. The momentum indicator Relative Strength Index (RSI) is at 49.90, which indicates a sideways movement in prices.