SHANGHAI, Nov. 23 (SMM) -- HSBC reported China's manufacturing PMI in November was 48.0, much lower than 51.0 in October. The shrinking manufacturing sector will trigger concerns over base metal markets, and domestic metal prices should be affected in the near term.

HSBC said industrial production growth may slip further to 11-12% during following months. Though new export orders were resilient, domestic demand has already cooled and overseas demand has started to weaken. The new orders index which draws much attention also dropped. The input price index dropped sharply to 43.2 following a slip in the previous month, indicating further easing inflation pressures. The evident slow-down in China's manufacturing industry to the contraction side signaled a quicker downward pace of the whole China economy, which will pose remarkable pressures for metals demand. The weakness in the China manufacturing industry will add to losses in commodities. According to Eurostat, the Euro zone economy only grew 0.2% in the third quarter, or 1.4% on a yearly basis, due to the region's debt crisis. The US economy grew an annualized 2% during the third quarter, which though is higher than the previous two quarters, has missed the estimate of the US Department of Commerce, indicating the U.S. economic recovery is still uncertain.

The manufacturing PMI fell, while oversea economic situation is still unclear. In addition, the Shanghai Composite Index has been falling for several consecutive days, and the metal market is still quiet. In this context, Shanghai metal prices should fluctuate at low levels in the short term.