Stan Chart sees 2010 zinc price at $1,500 per tonne

LONDON, June 19 (Reuters) - Standard Chartered (STAN.L) expects an upward momentum in zinc next year as demand improves, and has targeted zinc at $1,500 per tonne for 2010.

The investment bank raised its 12-month zinc price target to $1,414 per tonne this year from $1,402 previously, and to $1,500 versus $1,450 for 2010.

Zinc MZN3 for three-months delivery on the London Metal Exchange closed at $1,563 per tonne on Thursday. Used to galvanize steel, zinc rose to an eight-month high of $1,720 a tonne in June.

"We believe the main supportive factor for zinc is that demand has clearly been improving, albeit from a very low level," Standard said in a research note released on Thursday.

"In North America, order data is still presenting a mixed picture, with demand from steel mills still subdued; but with destocking having been halted, the market looks close to a turning point."

Standard added that without recent stock building by China, the zinc market would have been badly oversupplied, and estimated that the market will have a 373,000-tonne surplus this year.

"However, with demand likely to improve steadily throughout H2-2009 we believe that the worst period for fundamentals has already passed," the note said. (Reporting by Michael Taylor; editing by James Jukwey)