Market participants still see zinc market favorably

BEIJING (Asian Metal) 15 May 07 – The trade of zinc ingot went slowly in Chinese spot market in recent days, owing to the low demand from consumers. However, market participants still hold an optimistic attitude towards the zinc market in the coming weeks.

A trader in Guangdong said that he mainly deals with the zinc ingot produced by Zhuzhou Smelter, one of the largest zinc producers in China. He concluded tens of tones of SHG zinc ingot at RMB33,400/t on Monday. “The price is about RMB1,000/t higher than the prevailing zinc price in the local market for its better quality and famous brand,” said the source.

The trader said that the trade of zinc ingot is very slow, as most consumers are watching the market, with low buying interest. However, the source still believes that it’s possible for zinc ingot price to touch the high of RMB35,000 -36,000/t seen in May 2006, pushed up by the strong sentiment held by traders and producers. “I think that the zinc ingot produced by major smelters, such as Zhuzhou Smelter, Huludao and Shaoguan Smelter may breach the high of RMB38,500/t in June,” said the trader.

The trader admitted that the zinc ingot supply remains sufficient in the spot market, but some market participants are also holding back the material, expecting higher prices in the future.

As for the zinc export decline, the trader said that it may not press down zinc price in Chinese market in the future. “As the demand from European and American consumers remains strong, the decline of zinc ingot export from China may boost up zinc price on LME, which will push up zinc ingot price in Chinese market then.”

A zinc producer in Sichuan with the annual production of 50,000tpy said that the zinc market has a consolidation now at around RMB32,800-32,900/t delivered to Shanghai market. “After the consolidation, the metal may start another bout of rising in the future, impacted by the bullish copper market,” said the source.

The producer said that there is no sign showing that the price would slump so far at least. “The declining zinc inventory in the warehouse of LME indicates that the zinc market is still promising.”




Sam Xu
Sales Engineer

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