Just like they do with Copper, I think China is trying to "talk" the price of zinc down, so they can then acquire more at a lower price. The article says that China was a net exporter last year (2006); if so, where did all the world stockpiles of zinc go to then? Also notice that the Chinese government has started taxing exports of zinc, I assume that is to discourage them from leaving the country where they are needed. The exception is pure zinc which can be added to LME stockpiles, thus creating the impression that the shortage is disappearing. Finally, who is the Beijing Antaike Information Development Co.? From a recent article:
"Antaike is a research affiliate of the China Nonferrous Metals Industry Association. It advises the Chinese government on industry policy." Or perhaps they are the official spin doctor to represent the Chinese govt's own best interests.
>>China, the world's biggest producer and user of zinc, was a net exporter of the refined metal in 2006 for the first time in three years, reducing global supply concern that pushed prices to records.China exported 7,000 tonnes more refined zinc than it imported last year, and the country may be a bigger net exporter in 2007, said Feng Juncong, chief zinc analyst at Beijing Antaike Information Development.
The government has imposed a 5percent tax on exports of zinc with purity of less than 99.995 percent, effective January 1, according to the Ministry of Commerce. There is no export tax on zinc of 99.995 purity, which can be delivered on the London Metal Exchange.<<
