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Commentary
Lead and Zinc
Industrial base metals have had a particularly difficult time since the first quarter of 2001 when the downturn in the economy became apparent. Lead and zinc, it would seem, have been affected more so than others. The Mineral Commodities Summaries on lead (U.S. Geological Surveys, www.usgs.gov) noted that the 2001 benchmark price of lead reduced by 4.5%. World demand also declined from the previous year by 1% as the major economies contracted. The summaries on zinc noted it reached its lowest price on a ten-year tracking. The reaction by the lead and zinc industries has been a strategic shift from these metals, which has resulted in an overall reduction in production capacity. The trend began as early as April 2001 when Asarco suspended operations at its East Helena, Montana smelter, citing low lead prices and concentrate tightness. At the end of 2002, Noranda reported that it would curtail production at its Belledune, New Brunswick smelter and delay development of its Perseverance zinc deposit in northern Quebec. In Europe some weeks later, Metaleurop S.A. announced that it would shut down its Noyelles-Godault operations in northern France, effectively removing 140,000 tonnes of lead and about 90,000 tonnes of zinc. With the weakness in zinc...