S.Korea's Young Poong to cut zinc output by 10 pct
reuters.com
Sun Dec 7, 2008 6:40pm EST
SEOUL, Dec 8 (Reuters) - South Korea's second-largest zinc refiner, Young Poong (000670.KS: Quote, Profile, Research, Stock Buzz), plans to cut zinc production by 10 percent, starting from Monday, because of falling prices and weak demand, the company said.
The step follows similar moves by miners and smelters worldwide to cut output, close mines and delay projects as the worst financial crisis in 80 years and an ensuing recession threaten to slash demand, making it tough to foresee when prices and consumption may recover.
"This reduction plan, subject to review according to the future market circumstances, has been made in response to the weakening demand and plummeting prices for zinc caused by slowing global economies," Young Poong said in a statement on Monday.
Last week, Korea Zinc 010310.KS, South Korea's top zinc refiner with annual refining capacity of 450,000 tonnes, said it would slash output by 10 percent for 13 months until the end of next year.
Young Poong, the biggest shareholder of Korea Zinc, with a 26.9 percent stake, has zinc production capacity of 300,000 tonnes a year.
Korea Zinc controls 48 percent of the South Korean zinc market, followed by Young Poong with a 31 percent.
The global zinc market was in surplus by 112,000 tonnes in the first nine months of 2008, as refined zinc output grew faster than consumption growth, the International Lead and Zinc Study Group says.
On the London Metal Exchange, zinc MZN3 stocks rose to almost six days of demand at the end of October from 4 weeks of consumption at the end of 2007, while prices more than halved to $1,070 a tonne from the end of 2007. (Reporting by Miyoung Kim; Editing by Clarence Fernandez)
© Thomson Reuters 2008 All rights reserved |
