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To: LoneClone who wrote (35941)	4/23/2009 11:01:05 AM
From: LoneClone	Respond to of 194708

Global zinc surplus expected to hit 260,000 mt in 2009: ILZSG London (Platts)--23Apr2009 platts.com World supply of refined zinc is expected to exceed demand by just over 260,000 mt in 2009, according to a statement from the International Lead and Zinc Study Group, published Thursday. The group said that the figure was reached after taking into account the latest forecasts received from member countries together with purchases by the Chinese State Reserve Bureau and expected releases from the US Defense National Stockpile. "After having taken into account the recent closure of the refineries at Datteln in Germany, Balkhash in Kazakhstan and Copsa Mica in Romania, as well as production cuts in Belgium, Brazil, Bulgaria, Japan, the Netherlands, the Russian Federation, the United States and a number of other countries, it is expected that global refined zinc metal output will fall by 4% to 11.18 million mt in 2009," the ILZSG said in the statement. Production in India is expected to continue to grow strongly as a result of recent expansions in capacity at Hindustan Zinc's operations, and it is anticipated that output in China will rise by 2.2%. In 2009, global usage of refined zinc metal is forecast to decline by 4.9% to 10.92 million mt, the largest reduction since 1975. Demand in Europe is forecast to fall by 12%, in the US by 9.2% and in Japan by 12.9%, the ILZSG said. In China, a combination of increased spending on infrastructure-related projects and purchases of refined zinc metal by some provincial governments is expected to positively influence apparent usage and a rise of 4.6% is predicted. The group, which held its spring meeting in Lisbon on Wednesday, said that while the zinc metal market would remain in surplus, global zinc mine output was forecast to decrease by 6% to 11.08 million mt in 2009, primarily as a result of the large number of cutbacks, closures and startup delays announced over the past six months. Significant reductions in output are anticipated in Australia, Canada, China, Peru, Portugal and the US. The ILZSG said that these reductions would be partially offset by the opening of new capacity in Finland and Spain, and higher production in Bolivia, India, Iran and Pakistan.

To: LoneClone who wrote (35941)	4/23/2009 2:29:38 PM
From: LoneClone	Read Replies (1) \| Respond to of 194708

Monetary policy snarls gold-leasing machinery Submitted by cpowell on Tue, 2009-04-21 12:02. Section: Daily Dispatches Gold Price Could Hit $1,500 By Ambrose Evans-Pritchard The Telegraph, London Monday, April 20, 2009 gata.org The aggressive monetary policy of central banks around the world is playing havoc with the structure of the bullion market, creating a chronic shortage of gold that may soon push the metal to fresh records above $1,500 an ounce. Charles Gibson, a gold expert at Edison Investment Research, argues in a new report that negative real interest rates (below inflation) in the US and beyond has upset the "leasing" machinery in the gold industry and led to a sustained market squeeze. This is what occurred in the late 1970s, driving gold prices to $850 and ounce -- roughly $1,560 in today's terms. Gold finished last week at $870. Mr Gibson said the powerful dynamic could lead to a second leg of this gold bull market, even though the metal has already enjoyed a torrid run over the last eight years. In normal times, gold mining companies sell -- or "hedge" -- a chunk of their output in advance through bullion banks. These banks cover their positions by leasing gold from central banks. This bread-and-butter trade created excess supply of 500 tonnes each year until the start of this decade. Low real interest rates have caused the process to reverse, creating a shortfall of about 500 tonnes. The process accelerates as rates turn negative, leading to a scramble by market players to find physical gold. There are already reports that gold bars are becoming scarce, partly due to fears that futures contracts and other forms of paper gold may not prove reliable if there is a serious breakdown in the global financial system. Pure metal -- whether Krugerrands, Maple Leaf coins, or the "five tael biscuit" favoured by the Chinese -- entail no counterparty risk. Mr Gibson says the Fed's monetary blitz will end in another burst of inflation akin to the late 1970s. That is a disputed claim as deflationary forces tighten on the global economy. Some of the big global banks are already calling the start of a bear market. Rarely has the gold fraternity been so schizophrenic.