GFMS forecasts further slippage in zinc prices
According to UK based GFMS Metals Consulting zinc prices will continue to dip with an average price in the fourth quarter of 2007 of USD 3, 200 per tonnes compared with July 3rd 2007 price of USD 3,465 per tonnes as it move towards a more realistic base and production ramp ups near.
Mr Neil Buxton MD of GFMS Metals Consulting said that "Part of the decline in prices reflects the incredibly high base. From a fundamental standpoint, there is also the growing belief that the downtrend in London Metal Exchange inventories, from over 100, 000 tonnes to around 70,000 tonnes will be reversed in the second half of 2007 as higher mine output begins to have an impact on the market."
Further, China could revert to its natural standpoint as a net exporter of refined zinc. GFMS expected both China and Peru to significantly grow their output of the blue white metal in the second half of 2007.
Zinc, used mainly in alloys and to galvanize iron, traded at levels over USD 4000 per tonnes in January 2007.
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