Zinc on MCX settled up 2.44% at 193.45 as support seen from fresh buying after LME Zinc closed 3% up at $US2,860, having earlier hit a two-month high of $US2,877. Support also seen after LME data showed zinc stocks at their lowest level since June last year. After reporting U.S. consumer confidence at a fifteen-year high in the previous month, the Conference Board released a report showing a drop in consumer confidence in the month of January. The Conference Board said its consumer confidence index fell to 111.8 in January from a revised 113.3 in December. Chicago-area business activity was nearly flat in the month of January, according to a report released by MNI Indicators. MNI Indicators said its Chicago business barometer dropped to 50.3 in January from a revised 53.9 in December, hitting its lowest level since last May. The International Lead and Zinc Study Group released its initial 2017 report, which found the global market for refined zinc metal was in deficit over the first 11 months of last year with total reported inventories declining over the same time frame. The ILZSG revealed a significant increase in Chinese output while the world’s zinc mine production fell overall by 1.2%.Chinese imports of zinc contained in zinc concentrates represented a 42.3% decrease compared to the same time frame in 2015 with the Far East nation’s net imports of refined zinc metal growing 7.9%. Technically market is under fresh buying as market has witnessed gain in open interest by 77.86% to settled at 7358 while prices up 4.6 rupees, now Zinc is getting support at 189.7 and below same could see a test of 185.9 level, And resistance is now likely to be seen at 195.7, a move above could see prices testing 197.9.

Trading Ideas:

Zinc trading range for the day is 185.9-197.9.

Zinc prices gained tracking LME prices gained by 3 percent up at $2,860 on shrinking supply.

LME data showed zinc stocks at their lowest level since June last year.

Also broadly supporting industrial metals was news of steady manufacturing in China over January.