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Mitsui Mining & Smelting predicts zinc deficiency

Mitsui Mining & Smelting predicts zinc deficiency

Japanese компанияMitsui Mining & Smelting specializiruetsya in the production of zinc. Its analysts predict the shortage of production of metal in 2016. The global market deficit is expected to reach 440000 tons. The influencing factor will be the decrease in the production of zinc. About this trend was reported by representatives of Glencore and other companies. Considering the lack of production of zinc, you can count on a substantial shortage of the metal in 2016. In 2015 there was a surplus at the level of 200,000 tons.

The cost of metal is low. Such conditions are unlikely to force mining companies to develop the Deposit. However, the limit the supply of a commodity already, apparently, been reached. Some projects were closed. This approach will further limit the production of finished products. Japanese analysts suggest that in 2016, the offer will be reduced by 2.9%. It will be 13.6 million tonnes of zinc. The consumption will reach 14.04 million tons, an increase of 1.7%. Representatives of Glencore show a reduction of 500,000 tons of products. Company Nyrstar’s talking about the decrease in the production of zinc by 400,000 tonnes. In addition to industry leaders 10 manufacturers came to an agreement. A joint reduction in the production of zinc from their side will amount to 500,000 tons.

While initially very few people believed in a real decline in the production of metal. Now, however, this step is obvious. In aggregate, the estimated volume of production of zinc will be reduced by 1 million tons this year. How this trend will affect the global steel market in 2016? Mitsui analysts have compared the current situation with 2005. Then, the supply gap reached 370,000 tons. Demand from China has increased significantly. Accordingly, the cost of production in 2006 increased to 4500 USD/ton. The deficit in 2016 surpassed the 2005 figures. However, the decisive factor will be the demand for zinc. Experts believe that the cost of the metal will begin to recover in Molagoda. This is due to the fact that the stocks will inevitably start to decrease.

As to the prices, Quartile per ton expected to pay 1600 USD. In Cartile it will rise to 1700 USD. In Molagoda the cost will be about 2000 USD. In addition count on a sharp rise of prices is not necessary. Demand is poor. N. China accounts for about 40%. The rate of increase in consumption with his hand continue to fall.

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