Zinc price on a highway north: Macquarie

06 February 2006 | 05:24 Code : 7855 Geoscience events
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Macquarie is expecting a zinc market deficit of over 400,000 tonnes in 2006...
MACQUARIE Research suggests the zinc market may have to absorb much higher prices than the current record levels being achieved before some rebalance occurs in the demand-supply fundamentals.
Macquarie is expecting a zinc market deficit of over 400,000 tonnes in 2006 – which implies LME zinc stocks running out by the end of the year – and says that in the absence of a severe downturn in the global economy, it's "struggling to find enough supply response to change the situation in 2007".LME stocks were at 358,500t late last week, down more than 25,000t since the start of 2005 and less than half of the near-800,000t there were in April 2004.
Macquarie notes that there doesn't seem to be much substitution occurring at recent prices around $US1.09 per pound of zinc ($US2400/t), and believes it "highly likely that prices will have to move up to a level which kills off demand".No guesstimate on that score was made.Current Australian zinc producers or developers include Zinifex, Perilya Mines, Oxiana, CBH Resources, Kagara Zinc, Herald Resources, Union Capital, Jabiru Metals and Terramin Australia

tags: QAZVIN


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