AS per my prediction Zinc producers will not sell it on the market for less than the cost of production.In my view zinc will make a strong come back.
Investors who see this now, will make out like bandits buying large reserve exploration jrs at the bottom such as in the case of LTH.
A gift has been handed to investors who would like to add a zinc moly company jr with growing reserves.
James:
Zinc rises after smelters agree on output cut
ALFRED CANG
Reuters
July 14, 2008 at 6:38 AM EDT
SHANGHAI — Shanghai zinc futures gained 2 per cent on Monday after rising by their 4 per cent daily limit in the last session, following a weekend agreement by small- and medium-sized Chinese smelters to cut production by 10 per cent.
Shanghai's September contract, the most active on the Shanghai Futures Exchange, rose 315 yuan to 16,120 yuan ($2,360 U.S.) a tonne at the midday bell, while the LME metal eased $5 to $2,020 by 0333 GMT.
China's small- and medium-sized zinc smelters, accounting for about 30-40 per cent of output in the world's top producer, agreed on Saturday to cut production immediately to lift local prices. The deal came just two days after China's biggest aluminum smelters agreed to cut output by 5-10 per cent to ease escalating electricity shortages that threaten to push the country into its worst summer power crisis since 2004.
The production cut will run from July to September, said industry sources, citing the agreement.
“Aluminum and zinc prices are heavily influenced by Chinese supply,” said ANZ's senior commodities analyst Mark Pervan. “What happens in China will have a strong bearing on supply. Any curtailment news will have an impact on prices.”
China's large zinc smelters plan to meet on Tuesday in Beijing, an industry association executive said on Monday.
The meeting, organized by the lead and zinc division of the China Nonferrous Metals Industry Association, will discuss market conditions but the smelters had no specific plan to discuss output cuts, the division's director, Zhao Cuiqing, said. Shanghai September aluminum fell 55 yuan, or 0.3 per cent, to 19,695 yuan while LME aluminum retreated $3 to $3,315 after matching an all-time high of $3,380 a tonne on Friday.
Three-month lead was up $15 at $1,980 after reaching a five-week high at $2,080 in the previous session as falling stocks triggered fresh buying.
Shanghai copper rose 220 yuan to 63,090 yuan a tonne, while LME copper rose $60 to $8,330.
The gap in prices between London and Shanghai copper futures widened to 3,476 yuan from 3,196 yuan on Friday, including Chinese value-added tax. The gap reached its widest ever at 6,719 yuan on July 3.
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