[Zn] Impact of Stimulus Plan for Non-ferrous Metal Industry on Zinc Market

SHANGHAI, May 13 (CBI China) -- On May 11th, in order to cope with international financial crisis, ensure the stale development of non-ferrous metal industry and accelerate the structural adjustment, the comprehensive stimulus plan for non-ferrous metal industry has been released, with the period of 2009-2011. Attentions should be paid to two points concerning zinc market.

    First, 400kt of inefficient zinc smelting capacity will be eliminated in 2009. Current total domestic capacity is 4.9 million mt. In the mean time, Central Government will form 3-5 comprehensive Groups with strong strength through reorganization, and the proportion of output of domestic top ten zinc enterprises in China’s total output will be lifted to 60% from current 50% by 2011. As to domestic zinc concentrate supply, Central Government will strengthen the resources prospecting to increase the resource reserves and ore fields, and encourage large-size non-ferrous metal enterprises to invest in the exploration and development of mine to increase the self-sufficiency rate of resources so that the tight raw material supply will be eased.

    Second, the improvement of export rebate tax policy, the establishment of national reserve mechanism and the promotion of direct-electricity pilots will exert positive impact on long-term zinc price. 

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