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USA - Production pruning - CRU sees more zinc production cuts

Platts quoted Mr Graham Deller analyst of CRU as saying that the global zinc industry is in line for a further slew of production cuts over the next 6 to 12 months. He added that "We expect more mine production cuts to be announced." Mr Deller said that the concentrate market will tighten and smelter output will be constrained severely by a lack of feedstock. He added that "If people are losing 100 to 150 tonnes for more than a few months they will close, there is not the sort of money around to fund these sorts of losses." While some commentators have labeled the current economic crash the worst global financial crisis since the Great Depression of the 1930s, Mr Deller said that it was not yet clear it had reached that level of severity, or indeed was any worse than downturns in the 1980s and 1970s. He added that "China was not a player then, Chinese growth has slowed a lot, but is still lifting the global average." Mr Deller said that the 1 million tonnes of finished metal taken out of the market since October did not take into account the numerous cutbacks and closures rumored in China that were yet to show up in official data. D He said that during the last downturn, Western refined output did not start falling in earnest until five years after prices started heading down, he said. He added that "We are very bullish long-term on zinc and see high prices towards 2013. Although at the moment all participants are waiting to see if they are the last man standing, anyone who can stay in the business can look forward to profitable times in the future."

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