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 "Weekly Base Metal Report" by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd

The base metals pack moved Southwards, with LME Zinc being the top losing metal, down 10 percent. Metals were under pressure after new data from the world's major economies revealed slow economic performance, weakening the outlook for industrial metals demand.

China, the world's largest metals consumer, saw a drop in factory activity as COVID-19 cases appeared in the country amid the ongoing property crisis. China's official manufacturing PMI fell for the second month in a row in August.

Meanwhile, another trigger for the drop was US Federal Reserve Chair Jerome Powell's speech, which signalled more interest rate hikes, which propelled the US dollar index to a 20-year high of 109.49 on Monday. According to a member of the European Central Bank's executive board, the ECB may raise interest rates by 75 basis points at its upcoming meeting.

Nexa Resources, one of the world's top five zinc producers, has paused operations at its Atacocha San Gerardo open pit zinc mine in Peru owing to an illegal road blockage by a local community, compounding concerns over the ongoing zinc smelter catastrophe.

Outlook: We expect copper to trade lower towards 626 levels, break of which could prompt the price to move lower to 616 levels.

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