Zinc futures rise 4% on Shanghai Exchange

16 May 2008 06:24  [Source: ICIS news]

SINGAPORE (ICIS news)--Zinc futures have risen 4% or CNY750/tonne ($107/tonne) on the Shanghai Futures Exchange (SFE) since Monday’s massive earthquake in Sichuan on an anticipated increase in demand for the commodity in line with the reconstruction of the devastated province.

The July zinc contract was trading at CNY18,675/tonne on the SFE at around 11.30am (04:30 GMT) today, with the price representing a 4.1% increase over its settlement price of CNY 17,925/tonne on Monday.

The rise in zinc futures was due to the loss of zinc smelting capacity in the quake-stricken area, including the shutdown of Sichuan Hongda Chemical Co – the province’s largest smelter, which has a 100,000 tonne/year capacity, Hong Kong-based UOB Kay Kian analyst Zhang Xi said. 

"There will be massive reconstruction projects in the whole province (and there will be) a lot of demand for steel, cement and other raw materials", Zhang said, adding one can "imagine this demand as the province has over 100m people".

Zinc has many applications and it is used widely in galvanising, which is the main method of protection against the corrosion of steel.

Meanwhile, China was not expected to import any cement for the reconstruction, as it was likely to reduce exports and divert supplies for the purpose.

($1 = CNY7)

Have you personally or your business been impacted by the earthquake in China? If you have any information or thoughts you would like to share, post your comments or photos on the ICIS China Earthquake forum. You can also send photos and video directly to us at icisnews.asia@icis.com or icisnews.europe@icis.com.

By: Cheang Chee Yew
+65 6780 4359

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