Zinc Price
Zinc Declines to 17-Month Low as Stockpiles Increase; Tin Gains
By Chanyaporn Chanjaroen
Sept. 10 (Bloomberg) -- Zinc fell to the lowest in 17 months on the London Metal Exchange as growing stockpiles stoked concern that a glut of the metal will increase. Tin and copper rose.
Oversupply of zinc, which is used to galvanize steel, will reach 50,000 metric tons this year and 300,000 tons in 2008 as mine production grows, according to Societe Generale. Stockpiles of the metal monitored by the LME expanded 4,100 tons, or 5.8 percent, to 74,250 tons, the exchange said today. That's the largest one-day gain since March 16.
``The weakness in prices reflects not just today's stock rise but a trend of stock increases,'' Stephen Briggs, an analyst at Societe Generale in London, said today by phone. Stockpiles have increased 14 percent this month.
Zinc for delivery in three months fell $60, or 2.2 percent, to $2,715 a ton as of 10:36 a.m. in London, the lowest intraday price since April 4, 2006. The contract lost 11 percent last week, the largest decline since the week ended Feb. 2.
The metal has dropped 36 percent this year, the most among the six industrial metals traded on the LME. Lower prices will hurt profit at miners including Apex Silver Mines Ltd., whose $800-million San Cristobal zinc and lead mine in Bolivia started production in August.
Tin prices will be buoyed by a rising shortfall in supply this year, said Standard Bank Group Ltd., Africa's largest lender by assets. The bank raised its forecast for the so-called cash price to an average $14,180 a ton, 2.3 percent higher than an earlier estimate. The average so far this year is $13,764.