Zinc doesnt look very promising

#1
Rising Inventory Levels And Weakening Demand In Zinc.

Rising inventory levels and weakening demand from steel sector is expected to go against Zinc prices in coming days. Countries like India, US and Europe are also suffering from inflation. In Europe, the situation is dismal as they are suffering from high debts.

Zinc markets registered a surplus during Jan-Mar 2011. The surplus during first three months of the year was 166000 tonnes from the corresponding period previous year.

LME three-month forward prices have corrected by 14% since the beginning of 2011. The prices tested November 2011 levels going down to $ 2119 per tonne on 6 May 2011. The inventories of Zinc on London exchange have increased by 22% from 701425 tonnes in January to 852350 tonnes in May.

Monthly charts suggest for zinc indicate that the markets will see further slide towards its initial support of Rs 87. Constant requirements of funds for construction activities are not as easy as was before 2008 debacle. The rise of interest rates by central banks and increase of reserve requirements for banks in China and India has made lending norms tougher. Therefore the entire scenario for Zinc doesnt look very promising.
 

Similar threads