Lead, zinc may gain as China begins clean-up
Sunday, 21 November 2010
LONDON, Nov 20 (Commodity Online): China's clean-up action in smelting plants may impact the lead and zinc market in the coming days.
Even as Chinese government is determined to cap annual smelting of lead and zinc at 5.5 million tonnes and 7.5 million tonnes respectively by the end of 2015 to do away with the obsolete production facilities at highly polluting industries, metal markets the world over is watching the development with concern.
If China reins in the production, it will certainly hit the supply of the metals in the market. These metals will see an increased demand in the coming years as the world economies slowly recover from the recession impact. All put together, lead and zinc may gain in the coming days riding on the Chinese move to make its industry pollution free.
China has included the targets in the 12th five-year development plan, which runs from 2011-2015, which has been submitted to the National Development & Reform Commission, China's top economic planner.
China is the world's largest lead producer and consumer. Between 2005 and 2010, the country's lead consumption grew 12.03 per cent per year on average. Lead consumption may hit 5.1 million tonnes by 2015.
China's annual zinc consumption will grow to 7.1 million tonnes by 2015. Between 2005 and 2010, domestic zinc consumption grew at an average annual rate of 10 per cent. China became a net exporter of zinc in 2004.
And, inner Mongolia is expected to become China's main major zinc and lead production region. The region currently accounts for around 20 per cent of China's zinc production and 21 per cent of lead output, up from 8.5 per cent in 2004.
Meanwhile, gains in the entire base metals' pack at the London Metal Exchange (LME) after a weak dollar raised metals' appeal as an alternative investment, capped losses.
The London Metal Exchange also plans to launch reference prices for copper, aluminium and zinc based on activity during Asian trading hours from next January.
The LME said that its electronic trading platform, LMEselect, has seen early morning trading grow significantly in recent years, with average daily volume before 7:00 am London time up 90 per cent so far in 2010 compared with 2009.
LME's new Asian Benchmark Prices will bring further transparency to Asian trading activity on the Exchange and perfectly complement our existing official, unofficial and closing prices which act as reference prices for the world.
Even as Chinese government is determined to cap annual smelting of lead and zinc at 5.5 million tonnes and 7.5 million tonnes respectively by the end of 2015 to do away with the obsolete production facilities at highly polluting industries, metal markets the world over is watching the development with concern.
If China reins in the production, it will certainly hit the supply of the metals in the market. These metals will see an increased demand in the coming years as the world economies slowly recover from the recession impact. All put together, lead and zinc may gain in the coming days riding on the Chinese move to make its industry pollution free.
China has included the targets in the 12th five-year development plan, which runs from 2011-2015, which has been submitted to the National Development & Reform Commission, China's top economic planner.
China is the world's largest lead producer and consumer. Between 2005 and 2010, the country's lead consumption grew 12.03 per cent per year on average. Lead consumption may hit 5.1 million tonnes by 2015.
China's annual zinc consumption will grow to 7.1 million tonnes by 2015. Between 2005 and 2010, domestic zinc consumption grew at an average annual rate of 10 per cent. China became a net exporter of zinc in 2004.
And, inner Mongolia is expected to become China's main major zinc and lead production region. The region currently accounts for around 20 per cent of China's zinc production and 21 per cent of lead output, up from 8.5 per cent in 2004.
Meanwhile, gains in the entire base metals' pack at the London Metal Exchange (LME) after a weak dollar raised metals' appeal as an alternative investment, capped losses.
The London Metal Exchange also plans to launch reference prices for copper, aluminium and zinc based on activity during Asian trading hours from next January.
The LME said that its electronic trading platform, LMEselect, has seen early morning trading grow significantly in recent years, with average daily volume before 7:00 am London time up 90 per cent so far in 2010 compared with 2009.
LME's new Asian Benchmark Prices will bring further transparency to Asian trading activity on the Exchange and perfectly complement our existing official, unofficial and closing prices which act as reference prices for the world.