Zinc’s Outlook Is ‘Better’ Than Other Metals, Fortis and VM Say
2009-02-23 14:36:25.353 GMT
By Claudia Carpenter
Feb. 23 (Bloomberg) -- Zinc’s outlook is “probably better”
than that of any other industrial metal as production growth slows, Fortis/VM Group in London said today in an e-mailed report. VM wrote the report, which was paid for by Fortis.
On zinc:
“As recently as 2006-07, global zinc mine production had been growing well in excess of 5 percent a year. The rate of zinc mine expansion began to slow last year, dropping to year-on-year growth of 3.3 percent. Only one entirely new mine came on stream in 2008, Xstrata Plc’s Perseverance mine in Canada. Global supply should contract by 5 percent in 2009, to a total of 10.72 million tons for mined zinc and a total of 10.86 million tons for refined output.”
On cuts in capital spending:
“Announced reductions in capital expenditure by major mining and metals companies for 2009 total $27 billion, taking the total down to $48 billion.” Mine production cutbacks and reduced spending on finding new sources of supply may have “unprecedented effect on the supply pipeline in coming years.”
On supply cutbacks:
Nickel miners have announced production cutbacks equal to 16 percent of last year’s output, followed by about 14 percent for aluminum and about 12 percent for zinc, according to the report.
Copper miners have cut back the least at about 2 percent.
On metals prices:
Zinc will rise 25 percent to $1,500 a ton in a year’s time from $1,200 a ton two months from now as copper jumps 25 percent to $3,500 a ton, according to the report. Nickel will advance 12 percent to $12,300 a ton, and tin will rise 23 percent to $13,000 a ton, Fortis/VM said. It forecast gains of 9.1 percent to $1,200 per ton for lead and 7.4 percent to $1,450 a ton for aluminum. |
