SEPT 6 SATURDAY

Zinc prices likely to slide further on over supply.

With sliding zinc prices taking their toll on miners , they can

be forgiven for aski8ng when the market will turn upwards

- not any time soon , according to market experts.

The industry has seen mine closures and outpiy cuts as

energy , labour and equipmnt cost rise while zinc

prices drop.

The metal mainly used to galvanise steel , is one of the

worst performers in the metal complex this year.

In August it dropped to its lowest level since November

2005 and is now trading around $ 1745 a tonne down almost

25 % this year.

Zinc stocks at the LME have jumped 80 % this year to

160000 tonnes.

However some market watchers still expect a shift to a

deficit in 2010 as production cut spending and smaller

companies which generally operate zinc lead mines

struggle to find financing for new projects and to

gain environmental approvals.

Analyst expect the price to average $ 2073 a tonne

this year , $ 1900 in 2009 and jump to $ 3100 in 2010.

Cash zinc prices are forecast to average $ 2133 a tonne

in 2008 and fall to $ 2000 in 2009.

Weaker demand will also slow the reecovery

of zinc prices.

Signs are that demand in china , the world's biggest

consumer of the metal is beginning to slow strongly

and that the debate is whether internal demand will

slow as export markets for China also weaken.Consumption

is also falling in Europe as economies slow down.