SHANGHAI, Aug 17 (SMM) - Focuses of this week should include industrial output in July on a monthly basis in America, CPI in July on a monthly basis in the Eurozone, the new housing starts in July on an annual basis in the United States, and the quoted interest rate of the one-year loan until August 20 in China.
In terms of events, the Fed Chairman Powell will deliver a speech on August 18; the Fed's FOMC will announce the minutes of the monetary policy meeting on August 19.
A new round of the Fed’s monetary policy meeting will be held this week. Non-farm payrolls in July exceeded market expectations, adding 943,000 jobs. Policies adopted by the Fed will determine market sentiment. LME zinc cancelled warrants increased 21,500 mt to 70,225 mt last week, driving LME stocks to fall. The contango of LME cash to 3-month contract remained $10/mt. Fundamentals for LME zinc remained positive. LME zinc prices are expected to stand at $2,960-3,060/mt.
Power curtailment in Guangxi tightened in early August, but is likely to alleviate slightly in late August amid heavy rainfall. The affected output is in line with the previous forecast.
Some companies have reported that government stockpiles have arrived last week. However, the limited deliveries of zinc ingots in some high-risk areas of pandemic infections will affect the time of arrival. The third round of selling government stockpiles remains as the market focus. There were rumours that the tariff policy will be adjusted again in August, and some steel products will be levied export tariffs of 10-20%, which will hit the forward orders of galvanised sheet and plate.
Zinc prices are unlikely to decrease sharply before the removal of power curtailment. The most-traded SHFE contracts prices are expected to stand at 22,000-23,000 yuan/mt this week, spot premiums of Shanghai zinc stood at 130-180 yuan/mt over the September contract.