20 May 2014

The cost of zinc and the demand for it continue to grow

In China, the demand for zinc continues to increase, and therefore analysts do not rule out the possibility of the formation of the largest deficit in the supply of metal over the past 8 years. If the forecasts are confirmed, the demand will exceed the supply by 117 thousand tons this year. This figure is almost twice as high as last year, as for the cost of zinc, the next year will also not please the consumer, as it will invariably grow. By the last days of April, zinc on the London Metal Exchange since the beginning of this year has risen in price by 1.3% to USD 2,081 / tonne. While this figure is lower than last year's averaged data by 1.2%. Nevertheless, due to a decrease in zinc stocks in the stock exchanges and a gradual increase in demand, conditions arise for the growth of metal prices.

This state of affairs greatly influences the production companies. In particular, the company "Yunnan Hualian Zinc and Indium", China, in early March this year launched a metallurgical project, within which will be built a new enterprise with an annual capacity of 60 tons of indium and 100 thousand tons of zinc. The volume of investment under the assumptions of analysts will ultimately exceed $ 500 million. The new enterprise, after reaching full capacity, scheduled for 2016-2017, will be able to eventually replace all decommissioned to inefficient and not large enterprises located in the South-West region.

Kazakhstan's MMC "Kazzinc" also increases its production capacity - in the first quarter of this year, the output amounted to 75.3 thousand tonnes, while volumes for the same period last year amounted to 72.2 thousand tonnes. At the same time, the volume of zinc smelted by the company from its own raw materials in the first quarter of 2014 was 49.2 thousand tons, which indicates a 6 percent decrease. The production of lead for the reporting period was increased by 48%, which amounted to 32.2 thousand tons, copper smelting grew by 2% - to 15.4 thousand tons.

Gorevsky Mining and Processing Plant last year was able to increase the extraction of lead-zinc raw materials by 5 times in comparison with the indicators of the previous period, to the level of 349.6 million rubles. According to the company's representatives, the increase in revenues is directly related to the growth in raw materials production at Gorevsky deposits by 11.7%, which is 2.660 thousand tons, and also with an increase in the average market value of ore by 17%, which makes 710 rubles per ton.

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