Chinese Zinc Smelters to Cut Output by 500,000 Tonnes

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.

Click here to read the full Reuters report.