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Zinc surge up, how long it will last?
Q. Hi there,
I wonder if this is a technical question or not. The thing is that I am worrying about the constant rise in the zinc price and other metals. Is there anyone here who can give us a light when this pronounced surge up will end?
A. When the demand for metals decreases and well after the price of energy goes back to the old days. In short, probably never.James Watts
A. Hello Guillermo,
There are a few reasons for the spike in zinc prices. The devaluation of the US dollar and a decline in zinc inventories are the main factors. China now is a net importer of zinc and is consuming more than 25% of the world zinc each year. The supply deficit now coincides with a period of little mines in the development pipeline until late 2006. The Yukon Silver - Zinc Project hopes to start mine production sometime in the second half of 2007. This project is expected to keep pace with the increased demand in Asia, and help boost zinc inventories that are now low. From forecast reports I've read, prices will not drop until the second part of 2007. I guess we have to hope that China and Japan will be willing to invest in the new mining projects!
Mark and James,
Thanks for the answers.
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