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Zinc consumers fret over tight supply
LONDON, May 26, (Reuters) - The steel industry is closely monitoring moves in zinc prices as worries intensify about a possible market deficit, a U.S. steel maker said on Friday.
"At some time in the beginning of 2007, zinc supply is going to be so tight and the price will be astronomical and some people will not get their zinc," Douglas Brooks, a manager at Nucor Corp (NUE.N: Quote, Profile, Research), told Reuters at Metal Bulletin's zinc seminar in London.
Brooks said he was much more worried about how to obtain zinc, rather than its price.
The moment price became a problem, orders would drop off and the market would stabilise automatically.
"Eventually, zinc will be so expensive that people drop out, and then there will suddenly be plenty of zinc around," he said.
But before that happened, the price could go well beyond $5,500 a tonne.
Such levels would not be sustainable, but he still expected the price to stay around $1,500 a tonne.
"We will never see zinc at $800-$900 again," he said.
© Reuters 2006. All Rights Reserved.
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