China Key to Zinc’s Price Outlook, Says MMG’s Chief Exec

Reuters reported that Andrew Michelmore, chief executive of China’s MMG Ltd. (HKEX:1208), believes that zinc prices are set to rise as demand increases and large mines shut down. However, that outlook depends in part on whether China steps up to produce the zinc that will eventually be needed.

As quoted in the market news:

Michelmore said zinc prices are likely to increase as he sees the oversupply in the market shrinking sharply this year to around 50,000 tonnes or less. That’s less than half the surplus forecast by The International Lead and Zinc Study Group.

‘My view would be that when the numbers come out, I wouldn’t be surprised if there were no surplus at the end of the year in 2013. So in 2014, you’re going to start seeing it getting tighter,’ he said.

He said demand growth is good, but the key questions are on the supply side, in China and in the west, where about 1 million tonnes of supply will come out of the market as several older mines shut over the next few years, including MMG’s Century mine in Australia.

Click here to read the full Reuters report.