Mitsui Mining Expects Zinc Price to Hit $2,300 a Tonne

Mining Weekly reported that Mitsui Mining and Smelting Co. Ltd. (TSE:5706), which holds the biggest zinc smelter in Japan, expects the zinc price to hit $2,300 a tonne in the second half of 2015. The prediction comes on the back an anticipated rise in the zinc price.

As quoted in the market news:

Mitsui forecast last November that zinc would average $2 300 a tonne in 2015, but three-month zinc on the London Metal Exchange has fallen 16 percent from a three-year high of $2 416/t last July to around $2 037/t.

Mitsui expects the global refined zinc market to register a 250 000-300 000 tonnes deficit this year, compared with a 366,000 tonnes shortage predicted by the International Lead and Zinc Study Group (ILZSG) last October.

The Japanese smelter’s narrower estimated deficit reflects increased production by Chinese smelters in November and December to take advantage of higher processing fees and a wider gap in Shanghai and LME prices, Saito said.

Osamu Saito, general manager of Mitsui’s sales group, commented:

It’s been underperforming due to slumping oil prices, a higher dollar and worries about China.

Still, the price is likely to rebound toward $2 300/t in the July-December half as fundamentals including an expected deficit of global zinc market in 2015, 2016 and 2017 remain unchanged.

Click here to read the full Mining Weekly report.