Commodity Radar: US-China tariff truce leads recovery in Zinc prices. Here’s how to trade it on MCX

Zinc prices were trading lower on Thursday, taking cues from the overall mood towards the base metals. While Zinc prices have made a comeback since the announcement of a tariff truce between the US and China on Monday, traders remain cautious as fears of the global economic slowdown have not fully subsided.

On Thursday, the May contracts of Zinc on the MCX were trading at Rs 258.15 per kg, down by Rs 2.40 or 0.92% over the Wednesday closing price.

Benchmark copper on the London Metal Exchange (LME) was trading around $9,509 a metric ton, down 1% from Wednesday's close. That was 1.6% lower than last session's peak of $9,664, the highest since April 2.


Meanwhile, on the SHFE, zinc prices were up by 0.31% and trading at CNY 22,590 per mt.

A tariff truce between the US and China has given a fresh impetus to the base metals, with traders welcoming the move as fears of a global slowdown in light of the tariff war had weighed on the financial and commodity markets.

Fundamental snapshot

“Zinc prices have rebounded as concerns over global growth and demand eased, following the U.S. decision to reduce tariffs on Chinese imports from 145% to 30% for a 90-day period. In response, China has also agreed to lower its tariffs on American goods from 125% to 10% for the same duration,” Ajit Mishra, Senior Vice President, Research at Religare Broking said.

Technical Outlook

Zinc has shown a steady recovery after forming a base in the Rs 245–250/tonne range. A bullish hammer candlestick pattern has emerged, and prices have crossed above the 20-day Simple Moving Average (SMA), signaling positive momentum ahead.

Chart: Zinc Daily

IMAGE

Mishra recommends considering initiating long positions in the Rs 250–251/tonne zone, with a stop loss at Rs 244/tonne and a target of Rs 262/tonne.

Today, the prices hovered in the range of Rs 256.50 to Rs 261.40. The lifetime high is Rs 280.85 per kg.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)