Zinc market summary Oct 2007

Spot zinc ingot price keeps downward movement in Chinese market this week, and consumers still purchase with a small quantity for fear that the price would continue to drop in the short term. Concluded deals are thin in Chinese spot zinc market.

3-month zinc on LME market trend is unclear. The price drops from USD2,955/t last Friday to USD2,880/t this Monday, though zinc inventory reduces by 200t. In the rest of this week, the price fluctuates slightly and reaches USD2,865/t this Thursday, down by USD15/t compared with that early this week.

Different from 3-month zinc on LME, Chinese spot zinc ingot price drops greatly. The price declines by RMB300/t (USD40/t) to around RMB25,850-25,950/t (USD3,451-3,465/t) this Monday, down further to RMB25,450-25,550/t (USD3,398-3,411/t) on Tuesday. In the rest of this week, the price fluctuates slightly and stabilizes at RMB25,300-25,400/t (USD3,378-3,391/t).

Market sources pointed that Chinese zinc market remains soft, resulted from large stocks in domestic market and the increase of imported zinc ingot supply. Meanwhile, zinc consumers are reluctant to rebuild large stocks under falling prices. In view of the weak fundamentals of zinc market, participants hold pessimistic attitudes towards the future market.

In line with zinc ingot market, zinc concentrate price falls greatly. Miners revealed that it is difficult to conclude deals this week, since many major smelters begin to import the materials with low prices. The mainstream price of zinc concentrate 50%min is at around RMB16,200-16,700/t (USD2,163-2,230/t) delivered to buyers.

Compared with above markets, zinc oxide market keeps relatively stable. Zinc oxide 99.7%min price is at around RMB25,000/t (USD3,338/t), on a par with that two weeks ago.