Interesting blurb on zinc from Metal Bulletin
July 10 (Metal Bulletin) -- Zinc continued its latest revival
> this week to trade at around $1,047 per tonne basis three
> months on July 10. The market moved up steadily during the week
> and never dropped below $1,020.
>
> Market observers were relatively encouraged given that the
> other base metals slumped to fresh lows during the week.
> Analysts said there was some short-covering and book squaring
> at the end of the week and that this, together some good
> technical buying helped boost the market.
>
> One analyst said that if this recent spell of strength is
> followed through the market could soon break $1,060, but he
> remained sceptical about the chances, and noted that a similar
> rise at the end of last week was sold off the following Monday.
>
> A recent report has hinted at a possibility of a further
> recovery later this year. Prices should finish the year above
> $1,200 per tonne according to the latest report from Metal
> Bulletin Research (MBR).
>
> Negative sentiment is the major reason for the weakness of the
> zinc price, according to the study. MBR said that the
> underlying fundamentals of the zinc market are sound and
> although zinc prices are hovering just above $1,000 per tonne,
> many of the other market indicators are positive.
>
> These indicators include the accelerating decline in LME
> inventories while stocks are even falling at the Singapore
> warehouse. Another indication of tightening conditions has been
> the steady and widespread rise in premiums since the start of
> this year. Supply has been affected by various closures,
> strikes and technical problems while exports of refined zinc
> from China have dropped by some 30% in the first four months to
> 108,800 tonnes, although MBR noted that there is potential for
> stock accumulation in China given the continued expansion to
> refined output.
>
> According to MBR's analysis, demand conditions remain buoyant
> in North America and Europe. Apart from the positive economic
> climate, the combination of the commissioning of new
> galvanizing capacity, together with galvanized steel continuing
> to boost market share in the construction and automobile
> industries, is boosting demand for zinc. Smaller end-uses such
> as brass and diecastings are also exhibiting positive growth in
> these regions.
>
> In addition, although zinc demand has adversely affected by the
> economic problems in Asia, it is receiving some support from
> the commissioning of new galvanising lines such as SeAH Corp's
> 100,000 tpy line in South Korea and from higher galvanized
> output reflecting increased utilisation at recently opened
> facilities. It is only in the more established galvanized steel
> industry in Japan that production has actually fallen, strong
> gains are still being seen in Taiwan and South Korea, MBR said.
>
> MBR concluded that the strong economic performance in the key
> consuming regions of Western Europe and North America, together
> with the spate of galvanizing lines coming on stream, should
> enable zinc supply to outstrip demand.
>
>
> Metal Bulletin newsroom, London Tel +44 171 827 9977 Fax +44
> 171 928 6892 New York Tel +1 212 213 6202 Fax +1 212 213
> 6273
> -0- (BN ) Jul/10/ 98 17:06
> (MB) -- Zinc finds support
> 7/10/98 17:6
>
>
> July 10 (Metal Bulletin) -- Zinc continued its latest revival
> this week to trade at around $1,047 per tonne basis three
> months on July 10. The market moved up steadily during the week
> and never dropped below $1,020.
>
> Market observers were relatively encouraged given that the
> other base metals slumped to fresh lows during the week.
> Analysts said there was some short-covering and book squaring
> at the end of the week and that this, together some good
> technical buying helped boost the market.
>
> One analyst said that if this recent spell of strength is
> followed through the market could soon break $1,060, but he
> remained sceptical about the chances, and noted that a similar
> rise at the end of last week was sold off the following Monday.
>
> A recent report has hinted at a possibility of a further
> recovery later this year. Prices should finish the year above
> $1,200 per tonne according to the latest report from Metal
> Bulletin Research (MBR).
>
> Negative sentiment is the major reason for the weakness of the
> zinc price, according to the study. MBR said that the
> underlying fundamentals of the zinc market are sound and
> although zinc prices are hovering just above $1,000 per tonne,
> many of the other market indicators are positive.
>
> These indicators include the accelerating decline in LME
> inventories while stocks are even falling at the Singapore
> warehouse. Another indication of tightening conditions has been
> the steady and widespread rise in premiums since the start of
> this year. Supply has been affected by various closures,
> strikes and technical problems while exports of refined zinc
> from China have dropped by some 30% in the first four months to
> 108,800 tonnes, although MBR noted that there is potential for
> stock accumulation in China given the continued expansion to
> refined output.
>
> According to MBR's analysis, demand conditions remain buoyant
> in North America and Europe. Apart from the positive economic
> climate, the combination of the commissioning of new
> galvanizing capacity, together with galvanized steel continuing
> to boost market share in the construction and automobile
> industries, is boosting demand for zinc. Smaller end-uses such
> as brass and diecastings are also exhibiting positive growth in
> these regions.
>
> In addition, although zinc demand has adversely affected by the
> economic problems in Asia, it is receiving some support from
> the commissioning of new galvanising lines such as SeAH Corp's
> 100,000 tpy line in South Korea and from higher galvanized
> output reflecting increased utilisation at recently opened
> facilities. It is only in the more established galvanized steel
> industry in Japan that production has actually fallen, strong
> gains are still being seen in Taiwan and South Korea, MBR said.
>
> MBR concluded that the strong economic performance in the key
> consuming regions of Western Europe and North America, together
> with the spate of galvanizing lines coming on stream, should
> enable zinc supply to outstrip demand.
>
>
> Metal Bulletin newsroom, London Tel +44 171 827 9977 Fax +44
> 171 928 6892 New York Tel +1 212 213 6202 Fax +1 212 213
> 6273
> -0- (BN ) Jul/10/ 98 17:06
>
Last line may have been typo, meaning that demand should outstrip supply. |
