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Market Analysis: Zinc


Market Briefing - July 21, 2008

Zinc prices remained on a downward trajectory over June, hitting a new 2½ year low of $1,740/tonne on July 4, as the weak demand environment overshadowed support from the rise in power costs and a brief spell of national strike action in Peru. Short-covering associated in part with news of supply cuts (rumoured smelter output in China and concentrate in Australia) has however boosted prices in mid July to $2,024/tonne (July 11). However, by July 16, prices were back under $1,800/tonne.

Another bearish factor has been the continued accumulation of LME stocks, currently up above 153,000 tonnes. This and the lacklustre state of US demand, has put US premiums under pressure, falling to 3-3.5c/lb. As we head towards the traditional summer slowdown period of July-August, demand for zinc may decline further especially from the mature economies.


> This article gives the introduction to our latest detailed analysis on the market. In order to receive a free copy of the Base Metals Market Briefing, please contact: info@gfms-metalsconsulting.com.

Disclaimer: Whilst every effort has been made to ensure the accuracy of the information used in this document, GFMS Metals Consulting cannot guarantee such accuracy and GFMS Metals Consulting does not accept responsibility for any losses or damages arising directly, or indirectly, from the use of this information.

 
© Copyright GFMS Metals Consulting Ltd, 2008

 
 
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