CANCUN, Mexico Zinc
prices need to be as high as $3,000 per tonne in order to
stimulate new mining projects, according to CRU Group analyst
"Miners need to believe that
$3,000 (per tonne) is a price they can obtain," he said at the
International Zinc Association conference in Cancun Mexico.
"Zinc prices need to be 50 percent higher than last year."
The London Metal Exchange cash
special-high-grade zinc price closed the official session Feb.
27 at $2,084 per tonne.
The concentrates market could
fall short of demand from smelters by around 3 million tonnes
by the end of the decade, Deller said, but this could rise or
fall depending on such factors as the level of treatment
charges set during annual negotiations. "The real zinc price
must rise to induce more mines on-stream," he added.
But the path to higher prices is
far from clear.
"Zinc prices have been moving
recently due to a growing confidence in the world economy, and
in particular faith in China," Deller said.
But continued growth in China
might see smelters boost output and seek more concentrates,
thus further widening the gap in availability, he added.
There can also be other
consequences of higher prices, including the potential for
choked demand or the extension of mine lives.
At the same time, recent
improvements in LME zinc prices could prove to be a "false
dawn," Deller said.
Miners attending the conference
argue that the concentrates market is in deficit, and not in
surplus as smelters claim.