Japan's top smelters: supply surplus zinc prices are expected to fall moderately in 2020

SMM1 22: according to Japan's top smelters, with the market for the first time in five years surplus, zinc prices will fall moderately.

According to Kenji Sugawara, general manager of metal sales at Mitsui Mining and smelting, the average price of metals used in construction and cars is expected to be $2300 a tonne from April 1. That would be slightly below last year's average of $2507 and the recent trading price of $2404 at LME.

After four years of losses, the market turned to excess in 2020. This is mainly due to an increase in the supply of ore from smelters from India to North America. China, which consumes more than 40 percent of the world's metals, will limit production growth because of strict environmental regulations, preventing a sharp fall in prices, Sugawara said in an interview in Tokyo on Monday.

In 2020, Mitsui Minerals reduced premiums charged to overseas customers in Asia for the first time in four years, reflecting an increase in supply. Sugawara said it cut premiums by 5 to 8 per cent this year compared with 2019. Since April 1, it has not yet begun negotiations on annual contracts with domestic buyers.

Global refined zinc production is likely to exceed demand by 192000 tonnes by 2020, compared with a projected deficit of 178000 tonnes in 2019, the International lead and Zinc Research Group said in October.

"2020 (15th) lead and Zinc Summit"

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