zinc Falls a Third Day as Zinifex Says Zinc Supply Improving
By Brett Foley
Jan. 30 (Bloomberg) -- Zinc fell for a third day in London after Zinifex Ltd., the world's second-largest producer, said raw material for zinc production is more readily available than at the same time last year.
Stockpiles tracked by the London Metal Exchange have gained 11 percent to 98,100 metric tons in 2007. Miners such as Canada's Lundin Mining Corp. have increased production of zinc concentrate, the raw material shipped to smelters.
``Stocks have been rising and most people believe the deficit we saw in concentrates in 2006 will not be repeated,'' David Thurtell, an analyst with BNP Paribas in London, said in a telephone interview.
Zinc for delivery in three months on the LME declined $121 or 3.5 percent, to $3,380 a metric ton as of 5:08 p.m. local time. The metal traded at a record $4,580 on Nov. 10 and was the second-best performer on the LME in 2006 after nickel.
Increasing demand from China, the world's biggest consumer of the metal, helped zinc to surge in 2006. There was a deficit of 272,000 tons in 2006, Goldman Sachs Group Inc. said in a December report. Mining companies have increased output to fill the shortfall and capitalize on higher prices. Supply will surpass demand by 85,000 tons this year, Goldman forecast.
China became a net exporter of refined zinc in 2006 for the first time in three years, Beijing Antaike Information Development Co. said on Jan. 26, adding to stockpiles. Chinese exports of refined zinc rose to 325,000 tons last year from 146,000 tons in 2005, while imports dropped to 318,000 tons from 621,000 tons, Antaike said, citing customs data.
Barclays Forecasts
Barclays Capital, the investment bank of Britain's third- largest lender, cut its average 2007 price forecasts for zinc to $3,700 a ton from $4,200, according to an e-mailed report dated yesterday. The bank also cut its 2007 copper forecast to $6,025 a ton, from $7,550.
Copper gained $55, or 1 percent, to $5,640 a ton. LME- monitored inventories fell for the first day in seven by 3,275 tons, or 1.5 percent, to 210,400 tons. Stockpiles have increased 15 percent this year while shares have slipped 11 percent on concern that supply will beat usage.
Production of copper, used in pipes and wires, for the first 10 months of 2006 exceeded demand by 128,000 tons, compared with a deficit of 298,000 tons for the same period in 2005, the International Copper Study Group said on Jan. 18.
Among other LME-traded metals, nickel fell $1,675, or 4.5 percent, to $35,700, aluminum dropped $10 to $2,700, tin declined $200 to $12,050 and lead gained $10 to $1,660.
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