Global demand for zinc may dip

With the surging price of zinc, there are signs of a reduction in the global demand for this non-ferrous metal in January 2007, on a y-o-y basis. According to the Portugal-based global industry body, International Lead and Zinc Study Group, the global demand for this metal was 891, 000 tonne in January 2007 as compared to 914, 000 tonne a year earlier.

The industry group's statistics highlight that the slowdown in demand is primarily due to the reduced offtake from user industries in America and Asia (including India)

The global production of zinc amounted to 941, 000 tonnes in January 2007 as compared to 883, 000 tonnes a year earlier.

The slowdown in the global consumption of zinc has come at a time when the LME prices of zinc are hovering at $3,224 per tonne as compared to $2,462 per tonne a year earlier. The price of this metal at the beginning of CY 07 was $4259 per tonne.

The global consumption of zinc amounted to 110, 34, 000 tonnes in CY 06 as compared to 106, 39, 000 tonnes a year earlier. Hindustan Zinc is the key domestic supplier of this non-ferrous metal.

The company's production of refined zinc grew by 35 per cent y-o-y to 92,759 tonne in the December 2006 quarter, helped by its recently set up zinc smelter plant, coupled with a ramp-up of capacity at its Rampura Agucha mine in Rajasthan.

Zinc is largely used in the galvanised steel industry, where it is one of the key inputs. Zinc is also an input in the manufacture of batteries.