Zinc futures shed 1.7 per cent in the domestic market on Wednesday as investors and speculators exited positions in the industrial metal amid weak physical demand for zinc in the domestic spot market.
Speculation that a slowing Chinese economy, the biggest consumer of zinc in the world, may hurt demand for industrial metals, marred point of view . The world’s second biggest economy is tipped to expand at the slowest pace since 1990, curbing demand for zinc and other base metals.
A strengthening dollar has also played havoc by sapping demand for dollar-denominated commodities. Stronger dollar has cut the demand for zinc as an alternative asset. Stronger greenback makes Zinc more expensive for those holding other currencies, thus dimming requirement.
At the MCX, Zinc futures for July 2015 contract closed at Rs 127.25 per 1 kg, down by 1.7 per cent after Starting at Rs 129.35, against the previous closing price of Rs 129.45. It prod the intra-day low of Rs 126.85.
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