Mineweb
Continued market growth for zinc expected in 2007
By: Lawrence Williams
Posted: '29-JAN-07 12:00' GMT © Mineweb 1997-2006
LONDON (Mineweb.com) --In his latest research report, Numis Securities analyst, John Meyer, points out that, according to the International Lead & Zinc Study Group (ILZSK), world zinc consumption is forecast to reach 11.35million tonnes this year, up 2.6% from 2006. China is expected to account for 30% of world zinc demand with growth of 6.9% expected.
In the report, Meyer comments that China has been helping to drive up zinc prices with its high consumption levels as the economy continues to develop. It is by far the largest consumer with the US a distant second place with only 10% market share according to the ILZSG. 47% of zinc is consumed to galvanise steel which protects the steel against corrosion.
Also he adds that a zinc futures trading contract is to be launched in Shangahai to enable local consumers and producers hedge against risk, and he feels that this may expose the metal to further speculation and volatility.
.
He points out too that zinc prices are currently well below the US$4,600/t high of December 2006. Prices have fallen back in response to concerns on US manufacturing data, which had particularly affected copper prices with that metal being seen to move into surplus in 2007. The fall in copper prices dragged other base metals down too, but Meyer notes that the supply/demand position for zinc is likely to be rather different with supplies still likely to be in deficit by the end of the year, even though supply growth is expected to exceed demand growth over the period.
“Fears over security of supply are likely to prevent significant downward price moves for the time being, and there is considerable scope for a recovery. Market commentators have talked about a recovery in zinc prices to back over the US$4,000/t level” says Meyer.
Although there is new production anticipated to come on stream during the year (7.3% mine supply output growth is expected), any delays, labour disruption and other factors which may cause output to be curtailed, even temporarily, could have an immediate effect on the market. Warehouse stocks are still very low.
Mineweb always carries details of at least 20 independently written top mining, mining finance, metals and mining sector analysis articles on its homepage as well as a fast news feed to keep you right up to date with what is going on in the mining and metals sectors worldwide. These are continuously updated through the day. Click here to go to Mineweb's home page and access the latest news and comments on developments in mining and metals worldwide.
ZFX
zinifex limited
zinc reality check
-
- There are more pages in this discussion • 45 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)