MARKET TALK: Zinc Could Be In Surplus In 2007; China Exports

A switch in expectations of 2007 supply deficit to surplus for zinc continues to "haunt" market, says Standard Bank. Re-adjustment of expectations would constitute switch from "one extreme to the other," with high volume of Chinese net exports November, December 2006 pointing to even higher exports this year. "We believe that these volumes were partly inspired by change in tax regime in China in September 2006 which allowed existing contracts to be honored," Standard says, keeping close watch on Chinese zinc trade data in days ahead. LME 3-month zinc trades at $3,383/ton, down $12 on LME Tuesday kerb bid price.