China's Zinc Output Falls 4.2% in May, First Decline Ever
> 7/9/98 20:7
>
>
> Hong Kong, July 10 (Bloomberg) -- China's zinc output fell
> 4.2 percent in May, its first month-on-month decline ever, as
> the nation's demand for the metal slowed along with Asian
> economies, according to China Metals, which is published by the
> state-run Xinhua news agency.
> In May, Chinese mines produced 123,100 tons of the base
> metal, which is used mainly to make rust-resistant galvanized
> steel for the construction and car industries. That brought
> China's total zinc output to 865,500 tons for the first five
> months of this year, said the report, published fortnightly by
> China's official news agency.
> China's zinc exports, meantime, amounted to 19,900 tons,
> little changed from April. During the first five months of this
> year, China exported a total of 132,300 tons of zinc, down 33
> percent from the same period a year earlier.
> The decline in output was prompted by slowing demand for the
> base metal in Asia countries, whose purchasing power has weakened
> after their currencies were devalued. That dragged zinc prices,
> slashed producers' revenue and raised their costs.
> China's zinc production may falter to about 1.5 million
> metric tons, down from the 1.55 million ton target. Its zinc
> exports may total just 400,000 tons down from the planned 500,000
> tons, said Huang Guoping, a deputy director at China National Non-
> Ferrous Metals Import & Export Corp., the country's state-
> controlled metals company.
> ''We won't be able to meet the 10 percent production growth
> this year that we hoped to achieve because prices have dropped so
> much that our smaller zinc mines have to stop production,'' Huang
> said. ''The cost of mining and smelting in China is just too
> high.''
> A reduction in Chinese zinc output and exports will do
> little to bolster world zinc prices, which tumbled 28.5 percent
> in the past 12 months. Slowing demand in Asia, where recent
> currency turmoil tipped several economies into recession, may cut
> global zinc demand by as much as a third this year.
> Zinc for immediate delivery in China averaged at 9,900 yuan
> (US$1,192.80) a ton, down 13.9 percent since the end of December.
> Spot zinc is trading at $1,014 a ton on the London Metal
> Exchange.
> China produced about 1.41 million tons of zinc last year,
> exporting 544,456 tons.
>
> --Ho Swee Lin in the Hong Kong newsroom (852) 2977-6600/dg
> |
