Zinc Supply and Demand to Become More Tighter

The LME (London Metal Exchange) zinc price was as much as US$50 higher, closing at US$1,980 per tonne on January 9. Fundamentals of zinc are strong due to serious situations of the supply shortage. It seems that you need pay attention to zinc supply-demand more than expected. According to zinc supply-demand in 2006 by International Lead and Zinc Study, the ore production would be 10.5 million tonnes, up 4.2% from the previous year. The metal production would be 10.65 million tonnes, up 3.5%. The metal consumption would be 11.1 million tonnes, up 5.7% thanks to the firm demand for zinc coated steel sheets. The zinc supply would be below the consumption due to delay of resources development this year. Moreover, the metal supply would also be below the consumption thanks to closing of smelters this year. LME zinc stockpile was as much as just over 640,000 tonnes a year ago. However, the stock has decreased as much as about 40% to around 390,000 tonnes for since then.