Currency woes hit metal marts<\/p>\n
PERTH (Reuters): Demand for metals in Southeast Asia has
\nfallen off dramatically due to the region's currency crisis,
\nindustry executives and traders said yesterday.<\/p>\n
Orders for zinc and nickel, widely used in steelmaking, are
\nshowing signs of softening as countries such as Taiwan, Indonesia
\nand Malaysia re-think their ability to finance big infrastructure
\nprojects.<\/p>\n
Uncertainty over future demand for zinc in the region, which
\nis closely tied with automotive and structural steel galvanizing
\nactivities is placing further downward pressure on a market
\nalready reeling from recent price collapses, traders said.<\/p>\n
Much of the metal produced in Australia traditionally is
\nexported to Japan and South Korea, although Southeast Asian
\nmarkets have taken increasingly bigger shares in recent years as
\ntheir economies boomed.<\/p>\n
\"The currency crisis has really thrown a lot of companies that
\ngrew to depend on Southeast Asia into a loop,\" said one trader.<\/p>\n
Pasminco Ltd., the world'a biggest zinc company, has seen its
\nshare price slip as concerns mount that forecasts for zinc
\nconsumption may be overblown.<\/p>\n
Australia's largest nickel miner, WMC Ltd., this week sacked
\nnearly 10 percent of its workers in its Western Australia
\ndivision due to poor market conditions.<\/p>\n
Traders said they expected a backlog of metals to build at the
\nproducer, consumer and trading levels as Southeast Asian demand
\ncontinues to wane.<\/p>\n
Some copper is being diverted to other parts of the world,
\nincluding Europe, which is pushing down terminal and physical
\nmarket prices.<\/p>\n
Requirements for aluminum and copper sold in spot markets have
\nbeen particularly hard hit, as depreciated currencies coupled
\nwith reduced industrial activity begin to discourage buyers from
\nrebuilding stocks, they said.<\/p>\n
Greg Turnidge, managing director of Aluminum Smelters of
\nVictoria Pty. Ltd. (Aluvic), said that long-term contract sales
\nof aluminum to key markets were intact but that spot sales were
\ndown.<\/p>\n
Spot aluminum premiums have fallen in step with demand by as
\nmuch as US$10 or $20 a ton to around $65 a ton in Japan, Turndige
\nsaid.<\/p>",
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