SUBJECT: Zinc News Posted By: SheepBaaa
Post Time: 6/26/2006 07:24
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26 June 2006
Australia's ABARE: Zinc prices may keep rising next year
Source: Dow Jones
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Zinc prices are expected to surge 17% in 2007, adding to a forecast more than doubling this year as growth in global mine output continues to fail to match demand, Australia's government commodities forecaster said Monday.
Zinc is forecast to average US$3,500 a metric ton in 2007, up from US$3,000 in 2006 and US$1,382 a ton last year, the Australian Bureau of Agricultural and Resource Economics, or ABARE, said in its June quarter report. Spot zinc closed at US$2,940 a ton in London Friday.
"The rise in prices so far this year reflects a market characterized by slow growth in zinc mine supply, concerns over supply disruptions, strong global demand for zinc and low and steadily declining zinc stocks," ABARE said.
"Compounding these effects has been an increase in targeting of base metals such as zinc by investment funds and financial speculators," ABARE said.
A strengthening of world economic growth is expected to drive demand for galvanized steel, zinc's main use, in the construction and automotive industries in 2006 and 2007, ABARE said.
World production is expected to grow to 10.7 million metric tons this year, up from 10.3 million tons in 2005. A further rise in output to 11.2 million tons is forecast for 2007.
The gains aren't expected to be enough to cope with demand though, ABARE said.
World consumption is expected to rise to 11.1 million tons in 2006 and again to 11.4 million tons next year.
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