Date of Award


Degree Type


Degree Name

Doctor of Philosophy (PhD)


Economics / Economic Policy


J.R. Williams


Zinc, a non-ferrous metal, is consumed as an intermediate input in construction and a wide variety of manufacturing industries. Canada, Australia, Peru and Mexico together produce about 55 percent of the total output but absorb only about 8 percent of the total zinc consumed in the free market world. On the other hand, U.S.A., Japan and the E.E.C. countries together share in about 72 percent of the total consumption but produce only 25 percent of the total zinc ores produced in the free market world. These large imbalances in production and consumption of zinc place it in the group of important international primary commodities. The major aims of this study are to provide a systematic understanding of the institutional and behavioral characteristics of the world zinc industry, and to analyse its performance properties in the framework of a formal model of the international market.

A detailed study of the organisational structure of the industry reveals that as many as 24 corporate groups (including their multinational operations) share in about 65 percent of the raw zinc produced in the free market world. In the absence of any other information to the contrary, this low degree of concentration in terms of market control is taken as an evidence for the absence of non-competitive behavior on the sellers' side. However, the working of the free market forces has, often, been influenced by the intervention of the U.S. Government through its stockpile program, tariffs, quotas, and other measures for the protection of the domestic industry. This environment, in turn, has enabled the major U.S. producers to exercise some degree of control on the domestic market through the variations in their stocks of zinc and capacity utilisation ratio. However, the world market on the buyers' side consists of a large number of small consumers of zinc providing a competitive environment.

A fairly detailed market form of econometric model is built, based on the above institutional framework and relevant technological and behavioral features. An estimated version of the model indicates different systems of lag responses in the structures of demand and supply to the price of zinc, a very poor substitutability on the demand side, free market price as a long-run equilibrator for the U.S. producers' price, and an important influence of the U.S. interventions on the world market. The model meets reasonably well the predictability criterion based on the technique of dynamic simulation. The performance properties of the world zinc industry, analysed through dynamic multiplier simulation technique, show that the industry exhibits a reasonably stable market environment to the exogenous disturbances such as an increase in the activity levels of consumers and variations in the prices of substitutes. It is, however, quite sensitive to technological changes in the consumer industries. The stockpile policy of the U.S. Government does not seem to be properly geared to its objectives, and, in general, it seems to have restricted the development of the industry as a whole.

Despite the usual limitations of a first systematic study, it is hoped that this work will contribute towards a better understanding of the salient features of the industry, provide a reasonably sufficient scope for broad policy evaluations, and facilitate the forecasting of the behaviour of major market variables.

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