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Gold/Mining/Energy : ZINC The base metal. News and Views. Symbol Zn -- Ignore unavailable to you. Want to Upgrade?

To: Roebear who wrote (525)	9/23/2003 3:13:57 PM
From: Stephen O	Read Replies (2) \| Respond to of 3270

Re active zinc prices - I don't follow other than end of day, only relevant if you trade futures, which I don't. Here's some comment re Lead from Deutsche Bank - The International Lead-Zinc Study Group (ILZSG) last week released their September 2003 bulletin, reporting provisional data on the lead market for the January-July 2003 period. After undertaking a larger than normal number of revisions to the 2002 data, the ILZSG reported that on a global basis, there was a 86Kt deficit in the lead market for the period, compared with a revised 53Kt deficit the same period in 2002. On a WW basis, including net imports of refined metal from the former Eastern Bloc, we estimate that the lead market was only in surplus by 1Kt compared with a 25Kt surplus in the same period in 2002. The reduction in the size of the WW surplus is being driven by a reduction in WW production, whereas the widening global deficit is a function of steady Chinese consumption and limited global production growth. We expect the WW market to be in deficit in 2004-05 and as such we are forecasting an improvement in annual average prices over that time. China's net export capacity, however, remains a concern and we maintain our cautious view on the lead market outlook. - Consumption: World refined lead consumption grew by 61Kt (+1.6%) to 3.964Mt in the 2003 period. The increase in global demand was almost solely attributable to the 10.3% rise in Chinese consumption to 621Kt. In the WW, demand growth remains anemic at best, up 0.4%, as falls in US consumption (-3.9%) and in Taiwan (-10.4%) offset gains in the UK (+11.2%) and steady consumption growth in Germany (+4%) and Japan (+2.2%). - Production: World refined lead production totaled 3.878Mt in the 2003 period, up 28Kt (0.7%) YoY. This modest rise in refined production was the result of an 88Kt (11.9%) increase in Chinese production, offset by a similar fall (-83Kt or --8%) in European output. On a WW basis, refined production fell 2.2% to 2.799Mt, highlighting the negative impact of steady Chinese production growth, and the resultant net export capacity, on the global lead market. World mine production equaled 1.63Mt in the 2003 period, up 59Kt or 3.1% from the same 2002 period. - Inventories: The ILZSG reported that total commercial lead inventories fell to 467Kt at the end of July 2003, down 70Kt from July 2002. Over that time, LME stocks have fallen 35Kt while non-exchange stocks have fallen 38Kt. This put downward pressure on our stock-to-consumption index, which has now fallen to 4.4 weeks, below the long-run normalised level of 4.6 weeks.