Zinc futures price on MCX platform have fallen by nearly 16% in last one month as global supply widens.
MCX July 2008 contracts were down from Rs 100.20 to Rs 84.70 per kg on Friday while expiring June futures were also weakened to Rs 84.70, down by Rs 16.35 a kg over previous month on continued selling pressure, a local broker said.
In London Metal Exchange (LME), special high grade zinc spot was down 17% to trade at $1,885 a tonne on Thursday over previous month while 3 month contracts also fell 17% to trade at $1,916 a tonne over previous month on reduced buying from China and European buyers.
Total stocks at LME increased to 1,52,175 tonne up 23,600 tonne from 1, 28,675 tonne as on May 19, 2008.
?Futures prices may remain under pressure and are likely to fall further on higher supplies and increased LME inventories supported by reduced buying from China and Europe,? an analyst said.
The global zinc market will be in excess of 2.10 lakh tonne in 2008 and it was in surplus by 78,000 tonne during the first four months of this year, compared with an oversupply of 43,000 tonne during the same period of 2007, according to recent estimates from the International Lead and Zinc Study Group (ILZSG).
Production outpaced demand by 64,000 tonne in the first four months of the current year, the World Bureau of Metal Statistics said last week.
As far as demand is concerned, China was a net importer of refined zinc metal over the first four months of 2008 with imports of 4,000 tonne compared with net exports of 1.19 lakh tonne over the first four months of 2007.