SMM7, June 6: New Century Resources, an Australian resources company, is confident about the recovery of zinc prices, believing that despite the current fluctuations in zinc prices, zinc prices are expected to rise in the coming months as the epidemic alleviates.
Zinc production at the company's Century mine in Queensland rose 22 per cent month-on-month to 34500 tonnes in the second quarter, while direct costs fell 17 per cent year-on-year to US $0.79 per pound, or A $1.13. Century Zinc Mine has now achieved seven consecutive quarters of production increase and cost reduction, despite the outbreak, the company New Century will continue to increase its production.
Patrick Walta, managing director of the company, pointed out that from a market point of view, although zinc prices are still at a four-year low, the sharp decline in spot processing fees for zinc concentrate in this quarter has created favorable conditions for miners. In addition, zinc prices are expected to rebound as infrastructure projects to revive the economy continue to increase.
Fitch International (Fitch Solutions) predicts that zinc prices may rise slightly in the coming months as the impact of the COVID-19 epidemic on global demand weakens. As of June 22, Lunzinc had rebounded 14.7 per cent from its March low of $17844 a tonne, and we expect further rebound in the coming months, the agency said.
However, Fitch last week cut zinc prices to $2100 a tonne from an expected $2550 a tonne. The agency believes that zinc production is expected to maintain a long-term downward trend due to a surplus in the zinc market, which is mainly driven by depressed global steel production, as galvanized steel is the main application of zinc.
Fitch expects zinc production to grow by 2.1 per cent in 2020 and consumption to fall by 0.1 per cent. The zinc surplus is expected to reach 71000 tons in 2020 and a zinc shortage of 189000 tons in 2019.
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