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Chinese Zinc Smelters to Cut Output by 500,000 Tonnes
Nov. 20, 2015 04:17PM PST
Base Metals Investing Reuters reported that China’s major zinc smelters said Friday that they will cut output by 500,000 tonnes in 2016. That’s almost one-fifth of their output, and the same amount Glencore plc (LSE:GLEN) recently said it will take off the market.
Reuters reported that China’s major zinc smelters said Friday that they will cut output by 500,000 tonnes in 2016. That’s almost one-fifth of their output, and the same amount Glencore plc (LSE:GLEN) recently said it will take off the market.
As quoted in the market news:
A joint statement by ten of the world’s top zinc producers on the Shanghai-based consultancy SMM’s website said the move was aimed at controlling overcapacity.
Prices on the London Metal Exchange jumped more than five% to $1 620.50 in early London trade and were on track for their biggest single-day gain since Oct. 9, having hit six-year lows on Thursday.
However the cuts by the Chinese smelters account for only about 3.5% of the global market estimated at around 14-million tonnes next year. That is unlikely to help balance the market, which is still expected to see a surplus in 2016.
Chinese plans to shift the economy towards consumer-led growth away from manufacturing has also meant slower demand growth in the top consumer and contributed to the oversupply.