Hi All. SYDNEY, Sept 22 (Reuters) - Australia cut its estimate...

Hi All.

SYDNEY, Sept 22 (Reuters) - Australia cut its estimate of annual zinc output by 12 percent on Monday, citing falling prices and mine closures.
The Australian Bureau of Agricultural and Resource Economics (ABARE) said zinc output would total 1.49 million tonnes for the year to June 30, 2009, down from a previous forecast of 1.69 million tonnes and its 2007/08 estimate of 1.57 million tonnes.

London Metal Exchange zinc prices have fallen by a quarter this year to $1,776 a tonne on Monday, and by two-thirds from a record high hit in November 2006, on growing oversupply.

"The falling zinc price has led to several mines closing or reducing output," ABARE said in its September quarterly report.

Zinc has been one of only a few metals to suffer a major reversal in terms of Australian production.

The global zinc market saw a surplus of 77,000 tonnes in the first seven months of 2008, the Lisbon-based International Lead and Zinc Study Groups said last week. Refined zinc use rose to 6.775 million tonnes from 6.575 million a year earlier, while output was 6.852 million tones.

Rising production costs and weak prices have forced a number of Australian zinc producers to scale back output or re-direct mining efforts to focus on other metals in polymetallic mines.

When one examines the refined zinc use and output figures given above one sees only a surplus of about 80,000 tonnes so far for the seven months to August. The expected flood of zinc seems to be slowed substantially not only in OZ but the world in general. A few more mine closures could do wonders to the price of zinc.

Cheers.