Light on the far horizon--Zinc has endured a difficult period but there are signs that the darkest days are almost over

摘要

AFTER a three-month summer recess, the 20:20 series of investor seminars recommenced last Thursday with a focus on zinc. The morning event, which was arranged by Mining Communications Ltd (publisher of Mining Journal}, featured four speakers. Putting the corporate information into context was Giles Lloyd (pictured), who is responsible for the analysis of zinc and lead concentrates for CRU. The London-based commodity consultancy has been bearish on the metal for a few years, and Mr Lloyd saw no reason to change its position. He noted that the market was still in surplus despite China's huge consumption, and he argued that it is supply considerations that are important, rather than demand. Mr Lloyd was adamant that the industry faced a "record surplus" unless there was a further price response. CRU calculates that there is sufficient concentrate production from existing mines to satisfy all smelters (at full production) for the next five years. Many argue that further mine closures are inevitable. They note that over 25 percent of last year's concentrate production came from mines with pro rata costs of over 2,000 US dollars/t, and over half of all mines had costs over the current price of the metal (1,800 US dollars/t).