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Friday, May 23, 2014
Weak demand, high inventories may continue to drag Chinese Zinc prices down
Overcapacity, weak demand and high inventories will continue to drag down domestic zinc prices, said Shanghai Metals Market.
“High inventories are now exerting a big impact on prices in domestic zinc market,” Suo Fang, chairman of Yunnan Haolong Industrial Group said at SMM’s 2014 Lead&Zinc Summit (May 21-24) held in Qingdao. She expected zinc prices to continue under downward pressure, factoring in soft consumption and capacity surplus.
Despite rising zinc prices, the digestion of zinc stocks was slow, leaving inventories at domestic smelters high at 800,000 tonnes in the first quarter of this year. Chinese zinc smelters generally sit on 2-2.5 months of inventories, she added.
Sluggish prices would bold bad for the whole zinc industry chain in 2014, conference participants said at the Summit.