Japan's zinc consumption is likely to decline by 10% in 2009 from 500,000 metric tons the previous year due to production cuts announced by major consuming industries such as auto and steel, a senior analyst with Japan's Metal Economics and Research Institute said on Sunday.
"Toyota and other big Japanese car producers have announced big production cuts due to the economic crisis. Steel companies have also announced production cuts, which are likely to translate into weaker demand for zinc in the country," Yuji Nishikawa told Dow Jones Newswires.
The auto industry accounts for around 70% of Japanese zinc consumption, and Japan accounts for 10% of zinc consumption in Asia, he said.
"The situation is quite bad and if it continues, then Japanese zinc demand, which has been declining gradually every year, will go down further," he said.
In the last 10 years, the country's zinc consumption has declined from 600,000 tons to the current level of 500,000 tons due to industrial maturity, he said.
"However, Japanese zinc companies are waiting for the government to announce incentives for the auto and steel industry in its economic stimulus package, which is being formulated currently, to give a boost to demand," said Mr Nishikawa.
Production is likely to be stable around last year's level of around 600,000 tons, with global zinc prices likely to be in a range of $1,000-$1,500 per ton during 2009.
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