Zinc Rises to 6-Week High Amid Japan Optimism, Falling Exports
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> London, July 14 (Bloomberg) -- Zinc rose more than 2 percent
> to a six-week high amid optimism a change in Japan's government
> may trigger an economic revival that would boost demand for zinc
> in the world's third-largest producer and consumer.
> The resignation of Japan's Prime Minister, Ryutaro
> Hashimoto, after his party's crushing election defeat Sunday has
> increased optimism a new leader will do more to introduce tax
> cuts and speed economic reform to take the country out of
> recession. That should help boost demand for the metal.
> ''There is a sense of optimism now Hashimoto has gone,''
> said Robin Bhar, a base metals analyst at Brandeis (Brokers) Ltd.
> in London. ''Japan now has a clean slate to enact fairly
> innovative policies and escape the dithering ones of Hashimoto on
> tax cuts.''
> The three-month forward zinc contract on the London Metal
> Exchange rose as much as $22.50, or 2.1 percent, to $1,072.5 a
> metric ton, its highest since May 29.
> Zinc's main use is in galvanized steel, popular in the
> construction and auto industries for its rust-resistant
> properties.
> Also helping prices were a continuing decline in zinc stocks
> at London Metal Exchange warehouses as well as reduced exports
> from China, the world's largest producer, Bhar said.
> LME stocks have fallen over 100,000 tons, or 22 percent,
> since the beginning of the year, a sign demand is holding up even
> with the slowdown in the Asian region.
> Chinese zinc output fell 4.2 percent in May, its first month-
> on-month decline ever, according to China Metals, published by
> the state-run Xinhua news agency. Exports for the first five
> months of the year were 132,300 tons, down 33 percent on the same
> period in 1997, the publication said.
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