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Msg  38340 of 65647  at  1/16/2008 7:17:50 PM  by


Scotia conference - Teck on Cu Zn Pb

The Copper, Zinc and Lead Markets from a Producer Perspective - Andy

Roebuck, Teck Cominco Metals Ltd

Mr. Roebuck discussed the role that China

plays in the zinc market. He highlighted that

as an importer of zinc concentrates and exporter

of refined metal, China is viewed by miners,

particularly Teck Cominco, as a client in the

concentrate market, but as a competitor in the

refined metals market. China's zinc

consumption has grown from 4% of world

consumption in 1980, up to an estimated 32%

of world consumption in 2007 (Exhibit 1). Over

that same period, total zinc consumption has

grown from approximately six million tonnes to

11.5 million tonnes. Also of note, the U.S.

share of world zinc consumption has decreased

from 14% to 9% over that same period,

highlighting the massive shift in the direction of

zinc consumption away from the U.S. and

towards China.

It was also noted that the level of reported

refined zinc stocks reached a value of 19 days

of consumption in 2007, only slightly higher

than the previous low of 17 days of

consumption in 1976 and well below the 25 year average of 42 days. Teck Cominco

forecasts that the level of zinc in terms of global zinc concentrate stock will reach 30 days of

consumption in 2008, compared to the 25 year average of 67 days. As a result, Teck

estimates that there will be no significant surplus of zinc in 2008, and warns of possible startup

problems for many projects in 2008, most notably the San Cristobal project in Bolivia.

Scotia Comment - We continue to forecast a 2008 average zinc price of $1.10/lb with the

market moving from a nearly balanced situation in 2007 to a surplus of 367 kt in 2008. Yearove-

year supply growth of 8%, largely driven by mine restarts in the Western world, is

expected to outpace demand growth of 5%.


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