UNITED KINGDOM October 24 2014 11:15 AM
LONDON (Scrap Register): LME zinc prices are expected to average $2,520 a ton next year and $2,725 a ton in 2016, said Natixis in a Metals Review.

As the zinc market has progressively tightened over the past year, so zinc prices have rallied from less than $1,900 a ton throughout much of 2013 to around $2,300 a ton in September this year.

Despite forecasts for modest demand growth over the coming two years, the global zinc market is expected to tighten further as supply becomes increasingly constrained, and new mines are not expected to arrive until existing inventories are dangerously close to depletion.

Against such a backdrop, Natixis would expect to see substantial upward momentum in zinc prices over the period 2015-16.

In Natixis central scenario, after averaging around $2,200 a ton in 2014, they would expect zinc prices to push up to an average of $2,520 a ton in 2015 before $2,725 a ton in 2016.