Literally, the term commodity can be defined as a product or material. Though sometimes retail equity investors find commodities an unfathomable market, in reality, commodities are quite easy to understand. The market is full of advantages. In the world, there are about 50 major commodities markets with approximately 100 primary commodities trading options. Here, on our page, you can get the description of three broad commodity sections: bullion, base metal, and energy. This article is going to cover Zinc, a base metal. A live Zinc Price Chart is also attached, from where traders can monitor the price fluctuation of the particular metal.
How to Use These Widgets
If we start from the very basics, the first question should be what do we mean by the term “base metals”? In contrast to bullion metal, the base metal is inexpensive and easily findable. Since the ancient period, people have used some base metals as an exchange medium. Industrial and commercial purposes widely use everyday items composed of common base metals such as copper, zinc, and nickel.
Commodity Exchange
Commodity Exchange is a legal entity just like the Stock Exchange, under SEBI, which facilitates and determines the rules and regulations for trading. The commodity market began mainly with the trading of agricultural products. In India, there are multiple regional as well as national commodity exchanges. Some of the well-known commodity exchanges are MCX (Multi Commodity Exchange), NMCE (National Multi Commodity Exchange of India), National Commodity and Derivative Exchange (NCDEX), ACE (Ace Derivatives and Commodity Exchange), UCX (Universal Commodity Exchange), etc. Among the commodity exchanges, MCX is one of the largest and oldest exchanges in India.
Characteristics of Zinc
Since ancient times, people have used Zinc as one of the most useful base metals. Though the metal was discovered by a German chemist in 1746, long before the discovery civilizations were using zinc. At present, more than 11.9 million metric tons of zinc are being extracted, and More than 50 countries have zinc mines. The derived process of zinc is primary and secondary. The primary process refers to mining, and the secondary is recycling. The primary production process includes concentration, melting, refining, and alloying. Overall, in the world, India is in the 6th position in the mine production of zinc.
Usage of Zinc
- Galvanizing Material
- Alloys
- Diecasting
- Zinc oxide
- Zinc sulfide
Here, we provide the Zinc price support and resistance and the zinc futures daily candlestick chart above.
Zinc in the Commodity Market
Zinc has both organic and inorganic uses. Organically, it helps in the proper simulation of the Vitamins in the human body. Therefore, pharmacists use it widely in medicines also. Manufacturers in the industry use Zinc to make dry-cell batteries. Traders trade it as a commodity in the MCX exchange. In MCX, both Zinc and Zinc Mini were traded widely.
Zinc has a lot size of 5000 (5 MT), and Zinc Mini has a lot size of 1000 (1 MT) in the MCX exchange. Zerodha requires a margin of around Rs. 65000 for Zinc in NRML and Rs 33000 in MIS. Similarly, they require a margin of around Rs 14000 for Zinc Mini in MIS and Rs 7000 in NRML.
Intraday traders trade Zinc for a 50 paisa to 1 rupee price movement. They trade using the scalping technique with very small targets and a smaller stop loss. For every 1 rupee movement in Zinc price, traders gain or lose Rs. 5000, and in Zinc Mini, they gain OR lose Rs. 1000. Due to the habit of booking small targets, we always advise traders to use a smaller stop loss to maintain a healthy risk-reward ratio. Like other commodities, we advise keeping a 1:2 risk-reward ratio, i.e. if you are trading for 1 point, the target must keep not more than 50 paisa stop loss.
Final Thoughts about Zinc Price
The zinc price has seen a sharp decline over the last year, but that doesn’t diminish its importance to the industry. Zinc is an essential component in many products and processes, including steelmaking, electronics manufacturing and even construction. The volatile nature of this metal’s price means the exchange must monitor it carefully to ensure proper pricing strategies for consumers’ benefit. By understanding the dynamics of zinc prices and the industries associated with them, businesses can better plan for profitability while still recognising their commitment to providing quality goods at affordable prices.