NEW YORK (Commodity Online): Oversupply in the zinc markets has been one of the main reasons for weak prices. But the situation might soon change, says Selwyn Resources Ltd.
At the international Zinc Conference, Selwyn CEO Harlan Meade argued that close to 550,000 tonnes of additional supply will be required in the coming years in order to meet the demand. But lack of funding for small producers and deteriorating old mines are posing a chronic supply threat to the commodity. The end result- higher zinc prices.
Currently zinc markets is in oversupply. Standard bank predicts that supply will exceed demand by 539,000 tonnes in 2012. this will the highest level since 1993. A Morgan Stanley report predicts that Zinc markets will tip into a 110,000 tonne shortage in 2014.
LME Zinc had hit a peak of around $4500/tonne in late 2006 after which prices have been trading below $3000/tonne. Currently, zinc trades around $2000/tonne.
