Balkan reported that the world zinc surplus for the H1 of 2011 has increased by 8% compared to the entire 2010 with the Chinese inventories at historically highest levels reported the World Bureau of Metal Statistics.

WBMS said that the surplus in January to June 2011 stood at 427000 tonnes whereas for the surplus for the entire year of 2010 was recorded at 395000 tonnes. Zinc inventories were up by 263000 tones in January to June. Chinese consumed 43% of the global total at 257100 tonnes. The world demand grew 19900 tonnes in H1 2011 compared to H1 2010.

At the Multi Commodity Exchange of India, zinc has fallen from INR 109.95 to INR 98.70, a decline of over 10% for the year while at the London Metal Exchange zinc fell from around USD 2450 in January to around USD 2150 this month a decline of over 12%.

ABN AMRO had been negative on the metal. There is very little supporting the zinc price it’s only a matter of time before the metal’s bearish supply-demand fundamentals begin show themselves. The high price is simply encouraging more supply to come online and new zinc projects to be brought forward, which will only add to the surplus.

(Sourced from Balkan.com)