Zinc Tips

US zinc mine production increased by 6% in September, report from United States Geological Survey (USGS). Total recoverable zinc mine production was 60100 tonnes in the month of September from 56800 in August.

The total mine zinc production in January-September 2012 was 525000 tonnes. Average daily mine production in September was 2000 tonnes, 9% higher than that in August 2012 and slightly higher compared with that in September 2011.

Apparent consumption of refined zinc totaled 71700 tonnes in September compared to 74600 tonnes in the month of August. Meanwhile, reported consumption of Zinc in September was 36700 tonnes compared to 37000 tonnes in the month of August.

Zinc Tips

Large chunk of Aluminium is getting deposited in LME warehouses these days. Steady production levels from China and other parts of the globe and destocking of producers is resulting in the stocks getting accumulated in the London warehouses.
Aluminium inventories have been at all time highs and if the current inflows continue it would be a huge chunk capable of controlling prices at these levels for next year as well. LME inventories of Aluminium increased by 65200 tonnes to 5172500 tonnes today.
The heavy rise in inventories is due to attractive financing deals that allow traders to put their produce in warehouses with deliveries at a later date. Cost of funding is generally lower that makes these deal an instant hit. However with metal getting delivered in warehouses at a rampant pace prices are getting support of near term tightness.
LME Aluminium forwards was trading at $ 1978 per tonne on Tuesday. The metal settled at $ 1946 per tonne last night. Higher inventories is expected to be a dragger for long term appreciation in Aluminium though in short run spot markets supply tightness is aiding.

Zinc Tips

The Minister of Steel, Shri Beni Prasad Verma has said that during the year 2011-12, the country's total production of iron ore was 169.66 million tonnes (provisional) as against the total estimated consumption of about 116.3 million tonnes by the domestic iron and steel industry. Therefore, production of iron ore in India was in excess of the total estimated domestic consumption by the iron and steel industry. 

As per the available information, the hard coking coal spot prices are on a declining trend in international market during last one year and have fallen from the level of $310 per tonne in June, 2011 to $145 per tonne in October, 2012 (Free on Board (FOB) Australia; Source: SBB, as provided by Economic Research Unit, Ministry of Steel).

Zinc Trading Level's

ZINC OCT TRADING LEVELS FOR MORNING SESSION

S1 RS 99.50, S2 RS  98.90 , S3 RS 98

R1 RS  101.50 , R2 RS 102.45. R3 RS  103.25

MCX Copper Updates

MCX Copper futures are trading on a weak note following the frail outing for world equities and a sell off in the LME copper futures as global economic worries stayed in focus and the US dollar maintained its firm tone. The anti austerity protests turned ugaly in Greece and Spain and the Spanish 10-year Government bond yield jumped back over 6% on news that Catalonia wants to leave Spain. The LME Copper is down $93 or 1.10% to trade at $8161 per tonne right now.

The Spanish worries hit the stock markets in Europe hard and the major indices are down around 1.5-2%. Spanish stocks plummeted by 3.40% on the Catalonia effect. The Euro tumbled to 1.2850- its two-week low level on these cues. Germany cleared the last legal hurdle to ratifying the euro zone's new bailout fund on Wednesday with a cabinet declaration that addresses concerns raised by the country's Constitutional Court, according to media reports. However this was already factored in the market and the Spanish worries seemed to be the sole factor driving the market forces today.

LME Copper fell through the 8200 levels and gave up bulk of its yesterday's gain. The metal is holding on quite tenuously amid weak cues from equities and could fall further if equities turn in further bearish. Reports of Chinese bonded copper inventories surging to record highs are not helping the red metal much either.

In other metals, Zinc, Lead and Nickel are down more than 1% each. MCX Copper futures for November yet again failed to hold on around Rs 445 levels and fell in the afternoon trade. The counter quotes at Rs 442.25, down Rs 2.75 or 0.62% on the day. There has been a sharp rise of 6.80% in the open interest for the counter indicating heavy short selling as a critical break under Rs 450 in last week turns the sentiments bearish.

Zinc Tips

Zinc Tips :-

Remote prospects of demand for Zinc in short term has resulted in the metal going into a contango from backwardation in June, earlier this year. The metal has been hard hit by the rising steel stockpiles and lack of demand. Enough doubt on Chinese buying and continued ailment of Eurozone due to debt crisis has invoked short term fear in metal traders.
The change of Zinc from backwardation to contango also occurred as traders entered into long term financing deals in order to save them from uncertainty in present juncture. This limited the selling in London forwards that would have been more cruelsome in the absence of such deals.
The LME three month Zinc forwards were in a backwardation of $ 6 per tonne in mid June, but from there on the cash prices slipped sharply and Zinc is now in contango of $ 32 per tonne as of 8 October 2012. Since Mid August gap between cash and forwards have widened from $ 20 per tonne. The inventories of LME Zinc have increased by 21% in 2012 to 996225 tonnes. LME Zinc forwards were trading at $ 2042 per tonne on Monday, 8 October 2012, compared to $ 2010 per tonne in cash markets.
The major beneficiary in all this ambiguity has been domestic Zinc prices. The fall in Rupee has limited the blow on Zinc this year. Earlier in the year, lack of policy inaction by the UPA government led Rupee to weaken towards 57 against the Dollar. The sharp decline in Rupee made prices of Indian metals dearer for exports supporting the metal. Indian Zinc futures have increased by 7.4% this year to Rs 106.3 per kg. However from September profit booking and strength in Rupee has declined this metal from top of Rs 112.7 per kg in September 2012.