Teck Cominco executives Tuesday forecast that world zinc stocks...

Teck Cominco executives Tuesday forecast that world zinc stocks will contain only 11 days of supply by the end of this year, and may sink so low that it could “constrain metals consumption.”

In a conference call to discuss third-quarter financial results, the Vancouver-based miner also noted that lead LME stocks have declined to only two days of global consumption.

Mike Agg, Vice President Refining & Metal Sales for Teck Cominco, said the shortage of zinc concentrates is already limiting global metal production, as the globally tight concentrate market continues through 2006 and 2007. As a result, Agg said the deficit will cause the drawdown on zinc stocks to continue and could actually “constrain metals consumption. He noted that only 18 days of total global zinc stocks remained at the end of September. London Metals Exchange stocks have fallen 73% so far this year to only 3.8 days of global consumption, according to Agg. Meanwhile, zinc has hit a record high of $1.95 per pound.

Agg explained that zinc spot premium prices are rising in most markets, including that “strong demand is outstripping supply” and “a lack of availability [of zinc] in local markets.” Global zinc demand is up 5.5% in the Americas, 5.7% in Europe, and 4.9% in Asia, as of the end of August.

Meanwhile, although LME stocks of lead rose to 70,000 tonnes during the first half of this year, Agg said the stocks have now declined to the mid-40,000-tonne range. Currently, he estimated LME stocks only contain two days of global lead consumption. In the meantime, the lead price hit the historic high of 75-cents per pound on Tuesday. .......CONTINUES

RATIONING THE METAL WITH A PRICE OF 2.20 WILL HELP ENSURE THOSE WHO NEED IT MOST WILL GET IT(IF THEY CAN AFFORD IT)