Zinc settled down -0.35% at 142.6 after data showed that China's factory activity slowed to a three-month low in August, fuelling concerns over the health of economy. China's MMG Ltd, owner of the world's third-biggest zinc mine, said the global deficit in the metal had increased faster than expected, spurred partly by demand growth in China to rust-proof steel for cars. The global zinc market deficit expanded to 234,000 tonnes in the first six months of 2014, from a surplus of 28,000 tonnes in the same period last year, according to the Lisbon-based International Lead and Zinc Study Group (ILZSG). FOMC’s meeting minutes show the Fed will likely hike interest rates soon, weighing down base metals prices. A series of economic reports from the euro zone were disappointing. The single currency area’s manufacturing PMI slid in August to 50.8, the lowest since July 2013, while its composite PMI dropped unexpectedly to 52.8. US initial jobless claims for the week ending on August 15 came in at 298,000, fewer than the expected 300,000, while continuing jobless claims fell to the lowest since June 2007. The nation’s Markit preliminary manufacturing PMI hit a 4-year high of 58, with all sub-indices up from July, indicating strong performance in the manufacturing sector.  US Federal Reserve Chair Janet Yellen is slated to deliver a keynote speech on the labor market at the annual Kansas City Federal Reserve meeting late on Friday. Technically market is under long liquidation as market has witnessed drop in open interest by -1.9% to settled at 5155 while prices down -0.5 rupee, now Zinc is getting support at 142 and below same could see a test of 141.4 level, And resistance is now likely to be seen at 143.4, a move above could see prices testing 144.2.

Trading Ideas:

Zinc trading range for the day is 141.4-144.2.

Zinc edged lower after data showed that China's factory activity slowed to a three-month low in August, fuelling concerns over the health of economy.

China's MMG Ltd said the global deficit in the metal had increased faster than expected.

Global zinc market deficit expanded to 234,000 tonnes in the first six months of 2014– ILZSG