Zinc offtake strong despite high prices

Despite high prices, zinc consumption in the Asian region (including India) was strong between January and June 2007 on a year-on-year basis. According to the Portugal-based global industry body, International Lead and Zinc Study Group, zinc consumption in the Asian region (including India) amounted to 2,988,000 tonnes between January and June 2007 compared with 2,842,000 tonnes in the year-ago period.

The rise in consumption of the non-ferrous metal in Asian region has come despite higher average price of zinc on the London Metal Exchange. For instance, it was $3589.60 a tonne in the first half of CY07 compared with $2740.40 in the corresponding period of the previous year, analysts point out. Zinc is a key input for the galvanised steel industry and is also used in the manufacture of batteries. It currently trades at $3090 a tonne levels on the LME.

Hindustan Zinc is one of the key suppliers among domestic players and is expected to exploit this growth in consumption in India and neighbouring countries. In addition, HZL's production (mined metal content) was up 2 per cent y-o-y to 1.34 lakh tonnes in April-June 2007, while its refined zinc output was higher by 13 per cent in the same period. The global consumption of zinc also amounted to 5,659,000 tonnes in the first half of CY07 compared with 5,408,000 tonnes a year earlier, thanks to improved demand from Europe and Asia, highlighted the global industry body.