Hot Commodities: Zinc Crashes Under Rs 200 On MCX

MCX Zinc futures slumped today, sliding under Rs 200 per kg mark after a weak opening. The global cues are bleak with the LME Zinc futures tumbling to their lowest levels in last ten months on rising inventories and an uncertain global trade climate. A steep drop in copper recently has also been instrumental in pulling the metal lower. LME Zinc dropped around 1% on Friday, closing under the key $ 3000 per tone mark. LME Zinc inventories stood at 247250 tonnes as on Friday. The stocks have raced up after falling near a record low in early March 2018. The LME inventories have soared around 90% in last three and half months. MCX Zinc is currently trading down 1.60% at Rs 199.15 per kg. Asian markets are mostly lower amid broad worries over global trade and the recent volatility in asset markets.

The zinc market was in surplus by 143 kt during January to April 2018 which compares with a deficit of 486 kt recorded in the whole of the previous year, according to an update from WBMS. Reported stocks rose by 90 kt during January to April with a net increase in Shanghai of 39 kt over the period. LME stocks rose by 79.4 kt and 24.5 kt respectively in March and April closing at 237.3 kt which compares with 181 kt at the end of 2017. LME stocks represent 31% of the global total with the bulk of the metal held in US warehouses.

Global refined zinc production rose by 1.3% and consumption was 5.3% lower than the levels recorded one year earlier. Japanese apparent demand was, at 170.1 kt, 3.1% above the equivalent total for January to April 2017. The March figure was higher than usual due to a decline of 9.3 kt in producer stocks at the end of the Japanese fiscal year. World demand was 243 kt lower than for January to April 2017. Chinese apparent demand was 1950.8 kt which is just under 45% of the global total.