Zinc

[winston]

Metal prices surged, with zinc CMZN3 up 2.37 percent at $2,366.85, but off an earlier three-week high of $2,376.

It is up nearly 60 percent from January lows on worries about shortages.

[winston]

not vested

Why Zinc Doesn’t Stink

By Eric Fry

Global zinc demand has grown nearly 14% during the last four years. Meanwhile, the mine supply of zinc has fallen, causing a supply deficit.

Despite this recent deficit, the zinc price did not move higher. That’s because above-ground supplies of the metal, like those at the London Metals Exchange, were sufficient to fill the deficit.

The falling LME inventories, combined with falling mine production of zinc, will create a “pinch point sometime between now and six months from now.”

Zinc miners like Teck would benefit immensely. According to Lindsay, every $0.01 rise in the price of zinc boosts Teck’s EBITDA by about 1%, all else being equal.

Source: Non-Dollar Report

http://nondollarreport.com/2016/12/zinc ... ?src=email

[winston]

Chart of the day: Zinc’s got zing

by Nicole Elliott

The outlook for commodities is mixed this year, with the World Bank expecting them to surge while Agrimoney.com forecasts grains to fall and Australia prices for a sharp drop in iron ore prices.

Of the base metals traded on the Shanghai Futures Exchange, zinc presents probably the most interesting chart pattern.

Having traded smartly higher last year, retracing half of the slump from 2007’s record high of 35,590 yuan (US$5,166) per tonne, it has been working inside a right-angled triangle this year.

This week’s little hammer candle against its lower edge and above the 50 per cent retracement suggests a break higher is imminent and all aspects of the Ichimoku system are bullish.

Measured targets lie at 27,000 yuan and 28,650 yuan.

Source: SCMP

http://www.scmp.com/business/commoditie ... s-got-zing

[winston]

not vested

Lower - US$2590 from US$2625 from US$2694
a. Supply Deficit 1.2m tons;
b. High US$4400 (2007); Low $1600 (Jan 2016)
c. Used to prevent rusting, zinc oxide (paints), brass (copper), coins, fertilizer,
d. Producers: Glencore (GLEN.L), Trevali (TV.TO), Nevsun Resources (NEV)

[winston]

This Not-So-Precious Metal Could Make You Precious Returns

Zinc inventories at the London Metal Exchange (LME) have dropped to their lowest level since 2009.

“We actually think the most exciting commodity is zinc because it has already gone through its bottoming process and is in a distinct [supply] deficit... [So] we think zinc is just on the verge of [a] big move.”

Falling LME inventories, combined with falling mine production of zinc, will create a “pinch point sometime between now and six months from now.”

If the zinc price regained its 2006 high of $2.11 per pound, that would be a gain of 79% from the current quote of $1.18 per pound.

Source: Investment U

https://www.investing.com/analysis/this ... -200193025

[winston]

“Fair Is Foul, and Foul Is Fair”: Why This Foul Metal Is Looking Fair

By Eric Fry

The International Lead and Zinc Study Group projects zinc mine production to hit 13.7 million metric tons this year… which would be 223,000 metric tons shy of the demand forecast for the year.

Agricultural demand for zinc currently represents only 2% of total demand. That doesn’t seem like much until you realize that 2% of total demand equals half of this year’s supply deficit.

As an incremental influence in the market, agricultural demand for zinc could be very important. According to industry estimates, it could represent as much as 6% of total zinc demand by 2025.

1. The only “pure play” on the metal is a small London-based exchange-traded fund (ETF) called the ETFs Commodity Securities Limited Zinc (LSE: ZINC).

2. Here in the States, the closest thing to a pure play on zinc is not very pure. The PowerShares DB Base Metals ETF (NYSE: DBB) reflects the prices of three base metals: zinc, aluminum and copper.

3. Teck Resources has a large and growing exposure to zinc. In its most recent earnings report, the company’s zinc operations produced about one-third of net profits.

Source: The Oxford Club

http://energyandresourcesdigest.com/lme ... ?src=email

[winston]

Zinc: Recovery In Fundamentals Drives Prices Up

Zinc price has surged 24% to US$3,108/tonne ytd due to the stubborn global supply shortage and solid demand from China and Europe.

As overseas capacity restart and China’s production ramp-up were slower than expected, the deficit in the zinc market could persist in 2017-18.

Given its solid recovery in fundamentals, zinc is our favourite base metal.

We forecast zinc price at US$2,900 per tonne (+39% yoy) for 2017, US$3,050 for 2018 and US$3,080 for 2019.

Supply tightness persists. The tightness of zinc market is reflected in:
a) consistent decline of inventories in both LME and SHFE, which currently sit at a combined 323kt, its lowest level in eight year since Jan 09,
b) the capacity restart and new production rampup were slower than expected.

Solid demand support. China accounts for almost 50% of world’s zinc consumption.

Chinese macro data and trade figures suggest a steady zinc demand environment as of
July. From the consumption perspective of an end-user, we expect to see sustained
steady growth in auto (about 11% of total end-users consumption) and home appliance
(about 30% of consumption) sectors, while we see a slowdown in property sector in
2H17 due to tight policy control, which will be the major potential headwind for domestic
zinc demand.

We are positive on zinc market fundamentals and expect the market to be in deficit of
409kt in 2017

Source: UOBKH

https://research.uobkayhian.com/content ... 64b846d7dd

[winston]

The supply of zinc has decreased 10% over the last five years

Two of the world’s largest zinc mines (Century in Australia and Lisheen in Ireland) closed in 2016.

And in mid-August, China ordered a shutdown of all lead and zinc mines in its Hunan province. That’s a major zinc-producing region.

The International Lead and Zinc Study Group expects zinc demand to increase 3%.

Source: Daily Crux

[winston]

Commodities - Overall (UNDERWEIGHT) - Zinc: Good times do not last forever

Findings from our analysis of zinc projects worldwide indicate that 2018F could end up with a 324kt deficit in zinc, and a zinc surplus would only appear in 2019F.

There is downside risk to demand growth with global turmoil taking centre stage.

Inventory declined to 364kt currently from a high of 1.5mt in 2012. However, in recent months, inventory has stabilised suggesting better demand-supply dynamics.

With lower cash costs and capital intensity of projects, we do not expect significant delay in projects. Thus, upside to zinc prices is limited. Stay sector Underweight.

Source: CIMB

https://brokingrfs.cimb.com/uCKrkACypar ... ekTPA2.pdf

[winston]

Zinc's Horror Run Continues on Rising Supply, Trade-War Angst

By Thomas Biesheuvel

Metal price has fallen for nine days in worst run since 2015
Citi sees price headed for ‘bumpy grind lower’ to $2,500/ ton

Zinc Enters Bear Market as Trade Weakens Industrial Metals
Zinc continued to slide after entering a bear market amid concern about increased supply and declining demand.

The industrial metal fell for a ninth straight session, its longest losing streak in more than three years, to trade at $2,815 a metric ton on Tuesday, the lowest in 10 months. It’s the worst-performing base metal this year on the London Metal Exchange.

Source: Bloomberg

https://www.bloomberg.com/news/articles ... yptr=yahoo