Zinc Steps Into The Limelight

Zinc Steps Into The Limelight

On MCX, zinc futures have jumped up 16.32 per cent. The price of zinc topped USD 3,500 a tonne

The commodity markets have exhibited quite a volatile performance during the recent fortnight. Attracting the attention of all investors towards this market, the overall returns from all commodities have rallied from 0.87 per cent to 16.32 per cent. The most illuminating commodity during the fortnight was zinc. On MCX, zinc futures have jumped up 16.32 per cent. The price of zinc topped USD 3,500 a tonne. The prices climbed at the highest level as the world’s leading metals group Nyrstar announced that it would slice its production by 50 per cent at its three European smelters. Also, the communist nation is facing one of its worst power crises since coal prices have skyrocketed.


Zinc prices have zoomed about 45 per cent since the beginning of 2021. They have increased despite the Chinese State Reserve Bureau releasing 1,80,000 tonnes of the metal to control its spike. The prices are expected to trade firm until the power crisis is resolved. Following zinc, copper and aluminium futures gained 9.64 per cent and 7.31 per cent, respectively. Most of the metals were seen trading in green on Chinese custom data despite weak global cues. China’s copper imports advanced in September 2021 from the previous month, as per the customs data.

Meanwhile, the exports of unwrought aluminium and products stood at 4,91,985 tonnes in September 2021, the highest monthly level since March 2020. The aluminium prices rose to 13-year high on the back of higher demand and rise in Chinese exports. The WTI crude and Brent crude oil prices accelerated 7.16 per cent and 5.95 per cent, respectively. Oil prices traded at three-year high above USD 85 a barrel, magnified by forecasts of a supply deficit in the next few months as the easing of corona virus-related travel restrictions spurs demand.

The demand has picked up receiving inclination from power generators who have been replacing the expensive gas and coal to fuel oil and diesel. On MCX, cotton futures gave a rise of 4.62 per cent. During the fortnight, cotton futures traded at their highest price in about a decade with rising Chinese demand being met in part by increasing US exports to China. But after trading at a higher price, cotton prices were under pressure on the back of decreased demand due to power crisis in China.

World Agricultural Supply and Demand Estimates (WASDE) estimated a reduction in consumption of China. The gold and silver futures rose by 2.96 per cent and 4.96 per cent, respectively. Precious metals continued to fluctuate on mixed global cues over volatile bond yields and global inflation worries. MCX Lead was the weakest performing commodity during the fortnight, gaining a mere 0.87 per cent. It is predicted that China will continue to have a positive impact on metals’ demand and prices amid current slowed down economic growth and concerns over its property sector which could result in structural changes.

 

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