Giveaways hurting zinc industry

The American Zinc Association has charged the U.S. defence department with selling stockpiled zinc at prices below the market.

The zinc sold from that nation’s strategic stockpile has cost taxpayers more than US$1 million since March, the association says in comments filed with the U.S. department of commerce.

According to the association, more than 363,000 lb. of stockpiled zinc has been sold at 3-4 cents below the market.

The sales have cost the industry money and jobs, the association says. It argues that a discount drags down the entire market as buyers use the threat of buying at the low price to extract price concessions from other suppliers. Also, efficient private-sector producers lose normal price levels when competing against the government’s low-price sales.

The U.S. government began stockpiling various strategic materials in 1939 to avoid shortages in a national emergency, and over the years has bought and sold millions of tons of metals and other commodities.