price falling, page-40

Glencore confirm they will not increase production / re-open their mothballed plants if it has a negative effect on prices. RVR opening does not seem to be on their radar screen !!!

LME draw drawdowns increasing again after summer factory shut downs – I believe Zinc probably test US$ 1.45 by year end as I believe Macquarie are projecting – that should help RVR

From the FT

“Zinc has been the darling over the base metals markets over the past year. It has risen 30 per cent and is set to test $3,000 a tonne, according to Evy Hambro, Blackrock’s influential mining investor.
“With inventories on both the London Metal Exchange and Shanghai Futures Exchange declining to ‘price critical levels’, premiums rising and Chinese domestic supply faltering, the price looks set to test the $3,000/t level again,” said Mr Hambro in a half-year update from the Blackrock World Mining Trust, a fund he co-manages.
“A key focus for the market is when Glencore looks to bring back the production it took off the market in 2015, when prices were much lower.”
The Financial Times was able to put that question to Glencore chief executive Ivan Glasenberg on Thursday after the Swiss-based commodity trader and mining reported half-year results.
By way of context, Glencore idled a third, or 500,000 tonnes, of zinc capacity in October 2015, in a dramatic move that was widely interpreted as an attempt to put a floor under the price of the metal, which is used to rust-proof steel.
Here’s what Mr Glasenberg had to say on a possible re-start of production at Glencore’s mothballed zinc mines in Australia and Peru.
“We are going to be cautious and not jump the gun,” he told the Financial Times, saying that Glencore would not add tonnes to the market it if had a negative effect on prices.
Asked if he was concerned about new supply filling the gap left by Glencore’s cuts, Mr Glasenberg was dismissive, saying the company’s capacity would be needed.
“People talk about new production coming [into market] but it’s really not that much,” he observed.
“What’s really coming on? Gamsberg [a mine in South Africa] which is about 250,000 tonnes but then you have Skorpion [Namibia] which is leaving the market and was producing around 180,000 tonnes. Dugald River [Australia] is coming on stream in the second quarter of 2018… and not that much else. And if you look at the tonnes that have been taken out. Century [Australia] took out 500,000 tonnes and Lisheen [300,000 tonnes],” he said.
Mr Glasenberg added: “With demand growth of 2.5 per cent the world is going need an extra 390,000 tonnes per year. If you do those numbers the market is going to need our tonnes soon but we will be cautious when we bring it back on,“ he said.
Zinc for delivery in three months on the LME was down $19 at $2,909 a tonne on Friday.”