Zinc price fails to rise on Cominco fire

SYDNEY, April 17 (Reuters) - The production cut resulting from a fire at a big Canadian zinc smelter was unlikely to push zinc futures prices higher, metals dealers said on Monday.

Cominco Ltd said earlier on Monday output from its Trail smelter in British Columbia would be reduced by some 7,000 tonnes after an early morning fire on Sunday caused extensive damage to one of its buildings.

Last year, the smelter produced 288,700 tonnes of zinc. In Asian trading, three-month London Metal Exchange-trade zinc was fetching around US$1,112 a tonne on

Monday, down $7 from Friday's late price. "Zinc's fundamentals are looking up but such a small tonnage is unlikely to do much for the price," one dealer said.

According to forecasts, the fundamental outlook for zinc appears to favour a rise in prices, with Macquarie Bank Ltd last week predicting demand will outstrip supply by 60,000 tonnes this year.

Reduced output from the smelter will occur over the next six weeks due to the fire and a scheduled maintenance shutdown in May, Cominco said.

Zinc is sought by steelmakers for use in the galvanising process because of its anti-corrosive qualities.

Cominco said that a fire in a baghouse next to its Kivcet Lead Furnace and No. 3 Slag Fuming Furnace area caused extensive damage to the building.

The baghouse is used to collect zinc fume dust from the No. 3 slag fuming furnace. Slag fume is a key source of zinc.

Although damage was confined to the immediate area of the baghouse, the company was forced to shut down smelter and slag fuming operations.

http://www.canoe.ca/MoneyNews/apr17_comincofire.html

-- Carl Jenkins (Somewherepress@aol.com), April 17, 2000

Answers

Zinc is tremendously important in galvanizing steel. If these 7,000 tons add to the expected 60,000-ton worldwide shortfall for the year, this is no trifling matter.

Copper, natural gas, propane, now zinc. These shortfalls in production of vital materials bode ill for the world economy. It goes far beyond oil alone.

-- Wellesley (wellesley@freeport.net), April 17, 2000.

Mysterious explosion and fire in Edmonton yesterday, too, according to last night's tv news. Haven't seen anything about it online yet, though.

-- Rachel Gibson (rgibson@hotmail.com), April 18, 2000.