May 5 (Bloomberg) -- Refined zinc prices may climb by more than 50 percent in the next five years as growth in mine supply slows and leads to a global shortage of the metal used to galvanize steel, Macquarie Group Ltd. said.

London Metal Exchange zinc for immediate delivery may average $1.50 a pound ($3,307 a metric ton) in 2013, according to a report today by the bank's London-based analysts led by Jim Lennon. That's 25 percent more than previously forecast, and compares with the May 2 settlement price of $2,193.50 a ton.

Rapid supply growth in the near term notwithstanding, ``lower zinc prices and difficulty in securing financing are likely to limit zinc mine production growth in the longer-term, from 2010 onwards,'' Macquarie said. There could be a shortage of refined zinc by 2011 ``which could become extremely large by 2012,'' it said.

LME aluminum for immediate delivery may rise to $1.40 a pound ($3,086 a ton) in 2012, up 17 percent from an earlier forecast, the report said. The metal, used in automobiles, planes and beverage cans, settled at $2,876.50 on May 2.

There's no real tightness for aluminum this year despite power-related production problems in China and South Africa, the Macquarie report said.

``As a result of rising cash operating costs in China and rising capital expenditure costs globally, we have raised our long-term aluminum price,'' it added.

Ferrochrome Forecast

Power problems in early 2008 in South Africa, where up to 45 percent of global ferrochrome is produced, will continue to boost prices for the ingredient used in stainless steel for rust- proofing, the report said.

Ferrochrome may average $2.82 a pound next year, 80 percent higher than the bank's previous forecast, because of production cuts amid the power shortage in South Africa, the report said. Prices will average $2.033 a pound this year, 25 percent higher than the previous forecast of $1.625.

Ferrochrome producers in South Africa have been forced to reduce output to around 85 percent of capacity, cutting about 300,000 tons from the country's expected supply in 2008.

To contact the reporter for this story: Feiwen Rong in Singapore at frong2@bloomberg.net

Last Updated: May 5, 2008 00:46 EDT