Producers determined to fix the market

摘要

Zinc prices set a low of $1,487.50/tonne a week ago, then rebounded to $1,639/tonne onThursday before starting this week around $1,560/tonne. Developments in China seemto be behind the latest attempt to rebound, with producers looking to cut 500,000tonnes next year, asking regulators to look into aggressive shorting of the metals on localexchanges as well as lobbying the government to buy 400,000 tonnes to reduce thesurplus. All in all, this suggests a determination to get zinc prices higher. Given that zinc’ssupply fundamentals were already tightening due to Glencore’s cutbacks and the welltelegraphed mine closures, we feel the zinc market will soon move into a deficit and willremain in one. However, with sentiment focused on weak global demand it may takeactual evidence of shortages before the market starts to take note.