High demand could drive up zinc prices, survey concludes  After surging for nearly two years, many commodity values have dropped over the past few months amid mounting concerns over future global economic growth. Zinc prices served as one of the exceptions to the commodity boom, but analysts assert the metal is poised for growth.

Fundamental principles of supply and demand are coalescing to potentially drive zinc prices significantly higher. A survey of 10 producers, analysts and traders recently conducted by Bloomberg found zinc prices could jump as much as 27 percent in 2012.

Zinc prices last reached record territory in 2006, when they totaled out at $4,580 per metric ton. A subsequent uptick in production over the next five years helped fuel an oversupply, effectively driving prices down. However, worldwide zinc stockpiles are rapid dwindling, and Morgan Stanley analysts project surplus zinc supplies to hit their lowest levels since 2007.

Experts further assert burgeoning demand in China will largely serve as the main driver behind zinc's future growth. Roughly 50 percent of all the zinc mined in the globe is used in the rust proofing of steel. China's booming real estate market has led to a surge in construction projects, and steel use in the world's second-biggest economy has reached record levels.

Analysts project Chinese demand for steel – and therefore, zinc – to remain brisk over the coming years. Though it has slowed, China's economy is still forecast to expand at nearly twice the pace of the worldwide economy, which place upward pressure on zinc prices, analysts asserted.

"I'm bullish with regards to zinc over the next two to three years and even longer," Mine Life founder Gavin Wednt asserted in an interview. "Given the level of underlying demand for zinc and at the same time the fact that new reserves are not being added, there is going to be a supply side problem to emerge over the next few years."

Still, there are other factors potentially preventing zinc prices from jumping. Recent economic reports emanating from China and the U.S. suggest the worldwide economy is slowing as depressed consumer confidence and concern over stock market volatility and the European sovereign-debt crisis have prompted an economic deceleration.

On the London Metal Exchange, zinc futures dropped in trading on Thursday.

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