#commodity tips

CCI Guru Trader Reveals A Specific CCI Confirmation Signal

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Introduction

Traders looking to diversify their portfolios or to experience greater risks are often attracted to commodity investments, including commodity derivatives. One of the commodities traded in the Indian markets is the metal zinc. In terms of tonnage, zinc is the fourth most produced metal in the world - following iron, aluminium and copper. While this article does not give you any specific commodity tips, it does explain the basics of the zinc market so that you can seriously consider trading in zinc or its derivatives, so read on.

What are the uses of zinc?

It is used primarily as a coating for iron and steel to prevent corrosion, as a metal in die-casting and as an alloying metal in bronze and brass. It is also used in rubber, chemical, paint, electrodes, dry batteries and agricultural industries. 

Where is zinc found?

China leads the world in the production of zinc (at 4.3 million tonnes), followed by Peru, Australia, India (at 800k tonnes) and the USA. In India, Rajasthan has over 90% of the share of zinc production in India. However, India imports zinc concentrates from many countries including the USA.

Understand zinc futures 

Zinc futures (i.e. agreements to buy a fixed quantity of zinc on a fixed date at a fixed price) are usually bought by producers of steel (or other products in which zinc is a major raw material) in order to protect against volatility in zinc prices. However, they can also be used by speculators who trade in zinc futures. Zinc futures are traded greatly on London Metals Exchange (LME), Chicago Mercantile Exchange (CME) etc. - in India, they are largely traded on the Multi-commodity Exchange of India (MCX) as well as the National Commodity and Derivatives Exchange Ltd. (NCDEX).

Recent movement in zinc prices

In the past 12 months, zinc future prices have moved steadily and greatly. Zinc future prices for April 2022 rose to a high of ₹356/kg - but since then the price has seen drastic falls in most of the months and is currently at ₹277/kg with a lot size of 5. 

China is the largest exporter of steel, hence the demand for zinc is greatly driven by the demand for zinc and overall economic conditions in China. India and Japan are distant third and second in steel production, however, the domestic industry is still a major customer indeed.

Impact on zinc stocks

Over the last year, the stock price of Hindustan Zinc Ltd. (the largest producer of zinc in India) has fallen by 9.2%, but it is looking to rally in the past few weeks. In the same period, the stock price of Vedanta Ltd. (which owns a 64.9% stake in Hindustan Zinc Ltd.) has seen a slight fall of 0.7%.

Conclusion

Commodity Melting Down Confirming Upcoming Recession??

Commodity Melting Down Confirming Upcoming Recession??

Asian Open: Copper Sends Commodity FX To New Highs:

AUD and NZD pairs rallied into the weekly close on Friday as commodities and, in particular copper, pushed aggressively higher. Commodities chalked up another broad rise last week, with the CRB index (commodities index) rising for a fourth consecutive week and closing at its highest level since November 2018. The index is a basket of 19 commodities ranging from energy, agriculture and metals and…