Zinc settled down -1.6% at 117 as a measure of Chinese manufacturing fell to the lowest in more than six years. The factory gauge is the first major indicator for August and follows weaker-than-expected data on investment, industrial output, retail sales and exports in July. Prices also seen under pressure as concern about China's economic health gathered momentum in recent weeks. A plunging Chinese stock market and quick moves by authorities to devalue the yuan have fanned trader concerns that China won't reach its 7% economic growth target this year, despite cutting borrowing costs and other stimulus efforts. China’s domestic zinc concentrate TCs are expected to hold stable or fall slightly in the near term because supplies in South China remained tight. Output in South China, including Guangxi, Sichuan, Hunan and Yunnan was affected by the rainy season. Combined zinc inventories in China’s major markets, including Shanghai, Tianjin and Guangdong fell 3,800 tonnes last week. Inventories in Guangdong fell due to falling shipments from smelters which refrained from selling on low zinc prices. Outward shipments from Guangdong grew since some traders replenished stocks at cheap prices. Eurozone private sector growth improved in August underpinned by German activity, while the expansion in France eased to a four-month low, signaling the widening divergence between two largest euro area economies. The flash Purchasing Managers' Index ticked higher to 54.1 from July's final reading of 53.9 and remained at an expansionary level for the twenty-sixth successive month, preliminary data from Markit Economics showed. Technically now Zinc is getting support at 115.7 and below same could see a test of 114.3 level, And resistance is now likely to be seen at 119.1, a move above could see prices testing 121.1.

Trading Ideas:

Zinc trading range for the day is 114.3-121.1.

Zinc prices ended with losses as a measure of Chinese manufacturing fell to the lowest in more than six years.

Prices also seen under pressure as concern about China's economic health gathered momentum in recent weeks.

Combined zinc inventories in China’s major markets, including Shanghai, Tianjin and Guangdong fell 3,800 tonnes last week