Zinc mine capacity has risen so high that a “structural” surplus now exists, according to Metals and Minerals Research Services (MMRS). The English firm goes on to say that the market will regain its balance only when this surplus is removed.
That will happen only when “production capacity growth (slows) from that typical of the recent past” or when “expansions of demand accelerate in the years ahead.”
While a combination of the two would be ideal, MMRS “calculates the cross-over point to be still some years off.”
On the supply side, “an unprecedented spate of mine closures” is envisioned. However, production cutbacks might only delay the inevitable, MMRS warns. As well, new lower-cost mining developments and exports from Communist Asia and the former east bloc will only add to supply-side difficulties. About demand, MMRS is equally glum. Consumption is expected to slow compared with the 1980s.
Of comfort to prospective mine-developers is MMRS’s belief that, despite short-term softness, demand will escalate in the late 1990s. “The implication of this is that a number of new projects will need to be brought forward in the medium and longer terms,” the study notes. The preceding are some conclusions of the MMRS study “Zinc’s Structural Surplus: Temporary or Long-Term Blight.” It is available for 7,500 by writing to MMRS, 2-4 Henry St., Bath, Avon, England, BA1 1JT.
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