Zinc Market Might Approach US$ 3,700/t Again

Mitsubishi Shoji Light Metal Sales Corporation forecasts zinc price at London Metal Exchange might recover to US$ 3,700 per tonne again, approaching to the record level in May 2006, when the foreign exchange rate of US dollar would become weaker against euro.In May-June, LME zinc price touched record US$ 4,000 per tonne and plunged sharply by US$ 1,000.Zinc ingot supply is tight worldwide. International Lead and Zinc Study Group announced world zinc supply was short against demand in January-March 2006 and the shortage volume increased by 5,000 tonnes from January-March 2005. Zinc inventory held by LME decreased by 20,000 tonnes to 217,000 tonnes in June. Most shipment was from New Orleans, the U.S.A.The foreign exchange rate of US dollar is likely to weaken against euro hereafter. Weaker US dollar might stimulate speculation for international commodity markets more and zinc market could widely jump up again.