SHANGHAI, Nov 29 (SMM) - Focuses this week should include: Industrial/Economic Climate Index, CPI monthly rate and the readings of Manufacturing PMI in Eurozone in November, US ADP payrolls and US unemployment rate in November; China official manufacturing PMI, China Caixin Manufacturing PMI in November. In terms of events, the Fed Governor Bowman will deliver a speech on the central bank and the US economy this Tuesday. European Central Bank President Lagarde will participate in a round table meeting in Turin. The Fed will publish a Beige Book on economic conditions this Thursday.
In terms of LME zinc, the main reason for rising zinc prices last week is that Glencore's smelter Portovesme in Italy will overhaul a production line with a capacity of 100,000 mt/year, which will last until the end of December, in light of the rising electricity prices in Europe. At the same time, the low TCs caused by the shortage of zinc concentrate have made matters worse. Trafigura’s three major smelters have reduced their production by 50%, and the duration is unknown. Glencore’s remaining smelters have implemented staggered production, which has little impact on output. So what needs attention later is whether the time for production cuts will be extended and whether Boliden and Teck's smelters will be affected. LME inventory in Europe has reached a low of 5,150 mt, and the local spot premiums have recorded a new high of $290/mt. LME cash-to-three-month rose to $92.5/mt last Thursday. LME zinc prices are expected to stand at $3,140-3,350/mt this week.
On SHFE zinc, the consumption was sluggish amid high zinc prices, leading to an increase in the stocks across various regions. The market saw discounts last Wednesday. The output is expected to stand at 538,400 mt in December, down 10,000 mt from the previous estimate. The demand side is also not optimistic. There are air pollution warnings in north China, and the consumption of natural gas has also been restricted in some regions. These impact will aggravate in December. At the same time, there are mixed news about the production restrictions policy on the Winter Olympics in Q1 2022. The most-traded SHFE zinc contracts prices are expected to stand at 22,500-23,800 yuan/mt this week, and spot premiums of Shanghai zinc are estimated at -10-20 yuan/mt over the December contract.
