Another Record High of LME Zinc Price

Zinc price continues soaring at overseas markets. The zinc settlement price at London Metal Exchange (LME) increased to US$ 2,170 per tonne on Monday, marking the record for 2 straight days after the LME transaction shifted from sterling pound-based contract to dollar-based. The price could increase more when speculative money lifts the zinc price under tight supply of worldwide zinc ore and ingot. The prices were firm for almost all metals at LME on Monday, while the crude oil and gold prices declined slightly in the commodity market. Speculative purchases rush into lead and zinc trading and these prices are leading other metal prices clearly, said the source of Japanese major trading house.The LME zinc price increased by around 13% since the beginning of the year. The lead price increased by around 21%, continuing to renew the record. The zinc price was regarded as the leader of the non-ferrous metal market in 2006 with serious shortage of ore and ingot since the last half of 2005. Actually the price is soaring more than expected, involving the lead price.Some indicates the zinc price soars even abnormally. The zinc and lead prices become not strongly related with the copper price at present, when speculative purchases converge in zinc and lead rather than copper and aluminium. Overseas analysts recently repeat that the lead and zinc could keep firm even if other metal prices enter into adjustment stage.Japanese zinc users including hot-dip galvanizing processors are under pressure to review their budgets for zinc for fiscal 2006 ended March 2007. They are also concerned that the increasing material cost would impact on the processors’ profitability if the processors couldn’t pass the higher cost price on the products.