Technical Zinc: Here's What To Watch
Sina Soleymani | Dec 07, 2017 11:56AM ET
Christmas is approaching and global commodity markets are getting much more volatile and complex. markets are tightening up and selloffs happened during the last two trading days. Copper hits $6550 per ton, a two-months low due to worries about China credit liquidity and a rise in warehouse stocks, which was a huge one-day selloff for copper. Investors and companies noticed China's GDP growth rate and the country's possible 2018 economy growth obstacles that definitely effect supply and demand because China has 48% of global base metals demand and 50% of global copper demand. the numbers for growth rate is not 10% or 11% anymore but 5% or 6%. If 2018's data cannot recover to previous numbers, global commodity markets will be affected.
Zinc prices hit $3068 per ton and recovered $20 today. Hindustan Zinc Ltd. (NS:HZNC) has locked in prices for selling 220000 tons of zinc and 30000 tons of lead, it said in an earning statement on Monday. The India based miner said it hedged zinc at $3084 a ton and lead at $2418. A 165000-ton zinc of forward sales is for the first quarter of next year and the rest for the following three months. Worries about possible Glencore (LON:GLEN) next year regarding supply made the market cautious on the supply side. Glencore will likely bring supply back to the market in small increments, starting in 2018. The company will aim to make the "softest impact possible" on the tighter market it has helped to create. Glencore used to cut production to balance supply and demand and the policy helped 3.5% decrease in supply and recovering the prices.
We can see an Elliot Wave scenario for zinc below. $3300 is a very strong resistance, which has prevented the trend from further growth during last 2 months. The market needs huge stimulant fundamental factors to pass through the price level and if it happens, prices can experience another bullish rally in 2018. But if it lays below $2950 up to $3000, we could see more decline.
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