Production capacity fails to keep up with demand International zinc price reaches a new 16 month high
The international zinc price rose to a new 16 month high on June 19, because market investors worried that the growth of global metal zinc production might not keep pace with the increase in demand. At present, many zinc mine facilities in the world cannot operate at full capacity due to various reasons, and the commercial inventory has also decreased significantly.
According to the data from the London Metal Exchange, the global commercial inventory of metal zinc has dropped by 28% since the beginning of this year, hitting a 14 year low since 2000. A Japanese miner previously pointed out that the semi refined ore output of a zinc mine in Australia had been halved due to force majeure. The report released this week by the International Lead and Zinc Mining Research Group also shows that the global smelting output of zinc has not kept pace with the growth of consumption since this year.
Bart Melek, head of commodity futures business of Dominion Securities, pointed out that global commodity funds have become more and more interested in zinc futures. With the inventory near the bottom, there is still room for its price to rise further.
The price of three-month zinc futures in New York ended at 2153 US dollars per ton, hitting a high of 2161 US dollars within the day, the highest since February 20, 2013. Previously, zinc prices had risen for five consecutive days, the largest increase since the end of February this year.