"Reuters is running a story saying that zinc prices in China are...

"Reuters is running a story saying that zinc prices in China are expected to slide further because of oversupply, this according to various officials from mining and smelting firms. The price downtrend is expected to continue through the reminder of this year and into next, as producers are simply not cutting back production enough despite poor margins these officials say.

"The [price] situation cannot ease this year as Chinese major smelters are trying to produce more since they expect demand will improve in the autumn," one official said. China’s small and medium-sized zinc and lead smelters agreed in July to cut output by 10% in an attempt to lift prices, but the cutbacks are not being monitored, while the larger smelters have not come on board to lend the agreement much teeth."

http://www.kitco.com/reports/metals_sep082008.pdf