Breakwater Resources LTD (fka BWLRF)

[arnie70]

China's zinc appetite fuels bull market
By: Dorothy Kosich
Posted: '07-MAR-05 04:00' GMT © Mineweb 1997-2004



TORONTO--(Mineweb.com) Teck Cominco Market Research Manager Andy Roebuck suggested Sunday that significant "hidden stocks" of zinc may have disappeared--when combined with other factors--have created a bull market in zinc that will "most likely continue for a couple of years."
In a presentation to the Prospectors and Developers Association of Canada Convention, Roebuck said only seven weeks of zinc stocks remain as of last month. Meanwhile, zinc prices have been on the rise since 2003. Zinc concentrate markets are tight, and zinc mine supply isn't keeping up with demand, he added.

Roebuck predicted that zinc stocks "should be below normal until the end of this year." Since 262,925 tonnes of so-called "hidden stock" of zinc appeared on the market last year, and no significant deliveries of zinc have occured since last September, he suggested, major hidden zinc stocks no longer exists.

As is the situation with other metals, "China is having a very positive effect on the marketplace," Roebuck declared. He suggested that 2004 "was a major turnaround for Chinese export of refined zinc" as the nation's refined zinc consumption "is growing at double-digit rates." Roebuck added that "this low level of exports is expected to continue,"

Western world zinc concentrate balances are expected to decrease this year due to cuts in mined production of the metal and lower output from refineries, according to Roebuck. "The market is in significant deficit now," he declared, adding no new major increases in zinc mine production will occur until 2007 or 2008.