Zinc futures marginally up 0.10%

In restricted activity, zinc traded a shade higher in futures trade today, with prices rising by 0.10%.
On the Multi Commodity Exchange, zinc for delivery in December edged higher by 10 paise, or 0.10%, to Rs 105.15 per kg, with a trading volume of 914 lots.

The metal for January contract also moved up by a similar margin to Rs 106.05 per kg, with a trade turnover of 21 lots.
Market analysts said rising  domestic demand helped zinc prices to go up at futures trade here but metal's weakness at the LME, capped gains.
Meanwhile, zinc was be

http://business-standard.com/india/news/zinc-futures-marginally010-/152363/on

UPDATE 3-Horsehead seeks to transfer MF Global zinc hedges

Most hedging contracts were with MF Global

* Hopes to transfer contracts to new clearing agent

* Stock down 8 percent

By Steve James

Nov 4 (Reuters) - Horsehead Holding Corp , the largest U.S. zinc smelter, is trying to transfer hedging contracts with its clearing agent, a British branch of futures brokerage MF Global Holdings Ltd , which has filed for Chapter 11 bankruptcy protection.

Company shares fell 8 percent to $8.13 on the Nasdaq on Friday afternoon after the revelation in a press release announcing Horsehead's better-than-expected third-quarter financial results.

"We have no cash on account with MF Global," Chief Financial Officer Robert Scherich told Wall Street analysts on a conference call.

"These are LME (London Metal Exchange) registered contracts," he said. "We are talking with numerous clearing members. We have no reason to believe it (transfer) won't happen and expect to complete it in a matter of weeks."

The company started using hedging contracts, including all put and call options for 2012 and 2013, to protect it from zinc price volatility during a period when it is investing heavily in a new smelter in North Carolina, Scherich said.

During the third quarter, the price of zinc fluctuated between a high of $1.15 per pound and a low of 84 cents. The metal is currently selling for about 89 cents per pound -- way off its all-time high in 2006 of just over $2.

Scherich said the hedges on 75 percent of expected zinc production in 2012 and 2013 had a floor of 85 cents per pound and a ceiling of $1.20.

Pittsburgh-based Horsehead said the clearing agent for the majority of its hedging contracts was MF Global UK Ltd, a British affiliate of MF Global. It gave no details on the number of contracts.

The company said it thought it could transfer all of them to other members of the London Clearing House without incurring any loss.

Earlier on Friday, Jon Corzine said he had resigned as MF Global's chairman and chief executive officer four days after the futures brokerage filed for bankruptcy protection.

The bankruptcy filing came after MF Global's bets on European sovereign debt scared away clients, counterparties and investors. The company's decline accelerated after major credit rating agencies downgraded it to "junk" status last week.

In an interview with Reuters, Scherich said the mark-to-market of the hedges fluctuated day to day with the price of the metal. "The collar was at zero when we introduced them and at the end of June we would have had a negative $15 million, because the zinc price was up at the end of June.

"But it went down at the end of September and the mark up would then be $24 million," he said. "That's the volatility of the zinc price and the purpose of the hedges."

Scherich said Horsehead expected to lay the foundations for a new smelter in North Carolina in the first quarter of next year. It will replace the 85-year-old Monaca smelter near Pittsburgh.

"The hedges were put in place to give us a level of commodity price protection in an investment period. We didn't want the commodities to go down so much that it would disrupt this (smelter construction)."

Capstone Investments analyst Carter Driscoll said he was not too concerned. "These are futures contracts so it shouldn't be too difficult to find a new partner. There isn't any real cash impact until 2012."

Horsehead earlier reported its third-quarter net loss narrowed to $700,000, or 2 cents per share, from a loss of $2.4 million, or 5 cents per share, a year earlier.

Including a noncash mark-to-market adjustment for open hedge positions, earnings were $23.1 million, or 52 cents per share. On that basis, they beat Wall Street estimates of 10 cents per share, according to Thomson Reuters I/B/E/S.

Chief Executive Officer Jim Hensler said that although demand was strong, there were unusually high operating costs and reduced shipments due to production difficulties at the Monaca smelter as well as planned maintenance outages and higher energy costs.
http://www.reuters.com/article/2011/11/04/horsehead-idUSN1E7A30DU20111104

Zinc futures recover on global cues

Zinc prices recovered by 0.61% to Rs 106.35 per kg in futures trading today after speculators created fresh positions, tracking gains in base metals overseas.
Besides, pick-up in spot demand also influenced the zinc futures prices here.

At the Multi Commodity Exchange, zinc for July delivery traded higher by 65 paise, or 0.61%, to Rs 106.35 per kg, with a business turnover of 1,017 lots.
Similarly, the metal for August delivery rose by 55 paise, or 0.52%, to Rs 107.25 per kg, with a business volume of 10 lots.
Market analysts said a firm trend in the base metals at the London Metal Exchange (LME) and pick-up in domestic demand at spot markets, mainly influenced zinc futures prices here.
Meanwhile, zinc gained 0.5% to $2,392 a tonne at the LME.
http://www.business-standard.com/india/news/zinc-futures-recoverglobal-cues/140564/on

Trading opportunity seen in zinc & lead: SMC Global

SMC Global Securities has come out with its report on trading opportunity in zinc & lead.
Zinc and Lead have shown stunning recovery recently as Greece passed austerity measures but this will be short lived and it is only relief measure because overall euro zone problems is much bigger. Macroeconomic jitters surrounding Europe's debt crisis and potential monetary tightening in top buyer China will continue to weigh on the prices. Moody's cut Portugal's credit standing to junk, warning the country may need a second round of rescue funds before it can return to capital markets. So the inflationary concerns in China, Middle East tensions and spread of debt crises in Europe will continue to keep the prices under pressure.
Lead: Investors can take fundamental sell position in MCX Lead (August) contract in range of 120.80-121.80 for target of 116 and 114 with stop loss of closing above 124.10.
Zinc: Investors can take fundamental sell position in MCX Zinc (August) in range of 106.90-107.60 for target of 103 and 100 with stop loss of closing above 109.50.
Zinc witnessed extreme volatile movement in June 2011 as its prices hovered nearly in range of 96-104 in MCX. Mixed fundamentals kept the prices in tight range but the news of aid package for Greece supported the bullish sentiments during the last week of the month.
On mining front: Toho Zinc , Japan's No.3 zinc smelter planned to produce 21 percent less zinc in April-September first-half of this financial year than a year ago, or 45,000 tonnes, as its Onahama plant resumed operations on June 1 as planned.
China effect: Chinese zinc prices may fall further between June to August as smelters sell stocks and cut output on lukewarm demand, reducing imports of concentrate. China produced 9.8 million tonnes of galvanized steel in the first four months of 2011, up 18 percent on the year versus a yearly growth of 69 percent in January- April 2010. The bulk is zinc galvanized steel, the top user of China's 5 million tonnes of zinc consumption estimated for 2011. In the first four months, China imported 954,624 tonnes of zinc concentrates, down 10.7 percent on the year. Output from China's mines rose 8.7 percent to 1.1 million tonnes of zinc in concentrate. Japan's refined zinc exports for May fell 32 percent from a year earlier to 5,905 tonnes, narrowing from April's year-on-year drop of 40 percent.
International Lead and Zinc Study Group ---Zinc Estimates: According to International Lead and Zinc Study Group (ILZSG) global zinc market was in surplus by 178,000 tonnes in the first four months of 2011. In its previous bulletin, ILZSG estimated the market was in 111,000 tonnes surplus in the first quarter. Latest figures show global refined zinc use was 4.093 million tonnes in January-April 2011, compared with 3.943 million a year earlier. World refined zinc output rose to 4.271 million tonnes from 4.109 million over the same period.
Lead prices hovered in range of 107-118 in the month of June 2011. Prices remained on extremely volatile path in June month but witnessed swift rally in last week of the month amid rise in cancelled warrants in LME and overall positive sentiment which prevailed in the base metals pack after Greece passed austerity measure and EU come forward to support the Greece.
It is expected that Global Lead demand will rise by close to 6% in 2011, but world refined lead production is not growing as fast as the demand. Supply constraints and solid demand will push lead prices higher despite prospects a current crackdown on polluting battery-makers in top consumer China will hit consumption there in the short term.
Chinese Crackdown: More than 300 lead acid battery plants in China's eastern Zhejiang province and southern Guangdong province were closed in May for safety checks, cutting lead demand in the short term. In the longer term, the closure should not cut China's lead demand sharply as it is unlikely to extend for the rest of 2011. Battery production accounts for about 70 percent of domestic lead consumption. About three quarters of lead-acid battery manufacturing plants in China could be phased out in the next 2 to 3 years after Beijing launched a crackdown.

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Supply constraints and solid demand will push lead prices higher despite prospects a current crackdown on polluting battery makers in top consumer China will hit consumption there in the short term.
Lead demand is less vulnerable to economic cycles than that for most other base metals. About 40 to 50 percent is used in replacement batteries, which are subject to the vagaries of weather rather than economic conditions. Lead was resilient during the financial crisis and that's going to continue and hopefully be reinforced by a general pick up in new batteries for new cars and vehicles.
International Lead and Zinc Study Group Lead Estimates: The International Lead and Zinc Study Group (ILZSG) in April increased its forecast for surplus global refined lead production for 2011 to 123,000 tonnes from its last view of around 90,000. The global lead market was in surplus by 74,000 tonnes in the first four months of the year. In its previous bulletin, ILZSG estimated the market was in a 24,000 tonnes surplus in the first quarter. Latest figures show global refined lead use was 3.242 million tonnes in January to April 2011, up from 2.886 million tonnes in the same period last year. World refined lead output was 3.316 million tonnes, compared with 2.909 million tonnes a year earlier.
http://www.moneycontrol.com/news/brokerage-recos-others/trading-opportunity-seenzinclead-smc-global_563623.html

Zinc futures likely to surge on buying sentiments

MCX Zinc March contract yesterday traded with the positive node and settled 1.04% up at 105.55 after data released, US CCI for March was 63.4, lower than February's 72. The lower-than-forecast CCI has eased concerns over the US Federal Reserve (Fed)'s tightening monetary policies.

In yesterday's trading session Zinc futures has touched the low of 103.35 after opened at 104.65, and finally settled at 105.55. For today's session market is looking to take support at 104, a break below could see a test of 102.5 and where as resistance is now likely to be seen at 106.5, a move above could see prices testing 107.4.

Intraday traders can buy MCX Zinc March contract 105 with the stop loss of 103.8 and can wait for the targets of 106.3 and 107.

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