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

To: Stephen O who wrote (39)	2/4/1999 3:45:00 PM
From: Stephen O	Respond to of 3270

Zinc Rises to 5-Month High on Signs U.S. Economy Remains Robust London, Feb. 4 (Bloomberg) -- Zinc posted its biggest rise in 1 1/2 years and reached its highest price in five months after reports showed that manufacturing industries remain robust in the U.S., the world's top consumer of zinc. Factory orders rose 2.3 percent in the U.S. in December, the Commerce Department said, a sign that the outlook for zinc consumers such as the auto makers and construction companies could be improving. The National Association of Purchasing Management's production index also advanced. ''Zinc is up as people are looking at the macroeconomic picture,'' said Doug Upton, head of commodities research at HSBC Investment Bank Plc in London. ''Factory orders are good, in line with the NAPM, and people are going to have to revise their forecasts.'' Zinc for delivery three months forward on the London Metal Exchange rose $34, or 3.4 percent, to $1,025 a metric ton, its highest price since Sept. 15 and biggest one-day rise since July 25, 1997. The NAPM production index rose to 53.1 last month, from 46.8 in December, meaning more manufacturers reported increased production than those reporting a decrease. Before today's rally, zinc was close to its lowest price since August 1994, after falling about 15 percent during last year because of falling demand in parts of Asia. After the U.S., Japan, China and South Korea are the next biggest consumers of zinc. Still, analysts said zinc's rise could stall in the days ahead amid selling from Chinese producers, who have exported little metal in recent months because of weak prices. The lack of Chinese sales contributed to a drop in zinc stockpiles on the LME, which reached their lowest level since 1992. --Andy Webb-Vidal in the London newsroom (44-171) 330 7743/tc

To: Stephen O who wrote (39)	2/4/1999 4:49:00 PM
From: Ray Hughes	Read Replies (1) \| Respond to of 3270

Stephen: Cominco held conference call yesterday during which zinc market situation was reviewed. They note that IZA has turned from forecasting 1999 supply surplus to forecasting deficit. Also noted that Korean and Thai zinc consumption was strengthening. That is important given that Korea is major consumer. Said Western European zinc consumption, while slower than year-ago, was steady. North America is "still quite good," and although there is a "fair degree of (zinc) availability" the Chinese are shipping lower grade metal suitable mostly only for the brass industry. On balance Cominco's assessment was not bearish. One statement that merits close attention is that "there is a question whether Cortone (Italian smelter) (production) will continue." Its production rate is down significantly. Further, we hear from a major London metal trader that zinc will move up sharply over the next three days. RH