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Zinc prices are finally finding some support. After nine consecutive months falling, zinc made a decent comeback over the past few weeks, hitting a 3-month high. [caption id="attachment_76647" align="aligncenter" width="500"] Zinc Hits three-month high. Source: FastMarkets.[/caption] Analysts See Upside Potential Analysts see a lot of upside potential in zinc prices and many of them are calling a bottom and predicting price increases over the next two years. Analysts argue that the zinc market is tightening on a combination of mine closures and capacity cutbacks. Free Sample Report: Our January Metal Buying Outlook In October, Glencore announced its plans to slash zinc production by 500,000 metric tons. Just a month after, top zinc smelters in China indicated their intention to slash 500,000 mt of output in 2016. A Wider View: Not Bullish Yet If you narrow your view to the specific...
The International Lead and Zinc Study Group released its first report of the new year and found the global market for refined zinc was in surplus by 176 kilotons from January to November 2015 with total reported inventories falling by 5 kt during that timeframe. Want a short- and medium-term buying outlook for aluminum, copper,...
[caption id="attachment_71086" align="alignright" width="200"] Want a short-term buying strategy for zinc? Check out our complimentary July Metal Buying Outlook report![/caption] Zinc Drivers 1. Dollar to Euro exchange rate 2. Global production 3. Global capacity utilization 4. Zinc refining capacity utilization rates Market Commentary Last month we reported the International Lead and Zinc Study Group suggested 2015 demand for refined zinc would exceed supply by 151,000 metric tons. Those numbers have turned out to be wildly wrong - in fact zinc is running a surplus to the tune of 181,000 metric tons. In addition, buying organizations will want to pay careful attention to the flow of metal into LME warehouses. According to the most recent LME data available, zinc stocks declined in May by some 57k+ metric tons but some analysts believe that just the opposite will happen through July –...
[caption id="attachment_70211" align="alignright" width="200"] Want a short-term buying strategy for zinc? Check out our FREE June Buying Outlook report![/caption] Top Market Drivers 1. Dollar-to-Euro exchange rate. 2. Global production. 3. Global capacity utilization. 4. Zinc refining capacity utilization rates. Free Webinar: Are You Speculating When You Buy Spot Metals? Market Commentary Zinc remains the best-performing metal of all of the industrial metals. And though zinc fundamentals tell a mixed story – industrial-buying organizations should watch the dollar and commodities markets closely for a more likely price scenario for zinc. The Fundamentals The arguments supporting growing demand include detailed information recently collected by the International Lead and Zinc Study Group, suggesting 2015 demand for refined zinc will exceed supply by 151,000 metric tons. But this new deficit forecast has been revised down because of weaker-than-expected Chinese imports of refined zinc. But...
Zinc prices are in a falling channel, meaning that prices are falling and bounded by an upper and lower trend line. After 2 years of deficit, zinc supply has outpaced demand so far this year. Prices have plunged 33% in only 5 months. We might see zinc prices hitting a 6-year low soon.
From 2013 to 2015, zinc was in a bit of a deficit, but thanks to China — which is currently producing more than it is consuming in terms of this base metal — zinc supply has now outpaced its demand. Like the other industrial metals we cover, zinc is regarded to be in the "buy only as needed" camp. For 2016, we've identified the main zinc price drivers as: China GDP & PMI Data China zinc production Dollar to Euro exchange rate China imports of refined zinc For a long-term industrial buying strategy for zinc, complete with specific support and resistance levels, download your complimentary copy of our 2016 Annual Metals Outlook report! This report also includes commodities markets and industrial metals market analysis, in addition to key price drivers and commentary on aluminum, nickel, lead, copper, tin and various...
Every time a major producer announces closures the zinc price heads higher only to falter after a week or two and continue it’s downward grind. Free Sample Report: Our Annual Metal Buying Outlook Last month, Glencore announced it would cut 500,000 metric tons of output with 100,000 mt to hit this quarter, the London Metal Exchange price promptly jumped 10% only to resume its downward progress after a week or so, hitting a six-year low last week of $1487.50 per mt. China Joins The Output Cuts A recent joint statement by the top ten Chinese zinc smelters that they will slash output by another 500,000 mt next year, in an effort to shore up prices, had exactly the desired intent, prices jumped more than 5% on the news. [caption id="attachment_75345" align="aligncenter" width="550"] Miners are cutting back zinc production but prices...
Before anyone takes the FT article of this week — reporting on the unusual terms of Glencore’s zinc contract with miner Volcan and containing comments by a senior commodity analyst at Macquarie Bank that this suggests a particularly bullish view on the zinc market by the world’s largest independent zinc supplier, as a prediction that...
The one thing you can say about a confusing zinc market is we can expect it to continue with conflicting signals and be overlaid with volatility this month. Along with just about all the base metals, zinc has been on a relentless slide for the last year. Free Sample Report: Our New Monthly Metal Price Outlook They all enjoyed a short-lived rally in the spring but normal business quite promptly resumed and the short term expectation is for little change. [caption id="attachment_72449" align="alignnone" width="300"] Graph: Kitco.com[/caption] However zinc, like aluminum, has been the subject of intense investor interest because of the strong forward curve supporting the stock and finance trade. Stockpiles Trending Lower Metal stocks in New Orleans, a location sufficiently far from any significant area of demand to put the metal in limbo, are a direct result of this...
Zinc continued its downward slide last week as it hit a 5-year low last Monday due to fears about rising stocks and falling demand in, you guessed it: China. The base metal fell by its maximum daily limit of 5% in trading on the Shanghai Futures Exchange as a result, reported the Financial Times. The rising stocks can be placed at London Metal Exchange warehouses in New Orleans, which climbed nearly 60% over the past month, showcasing just how much zinc could be unloaded in the market. Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel?Subscribe to our monthly buying outlook reports!   "The recent increase in LME inventory, particularly in New Orleans, appears to have drawn the market's attention to just how much zinc is sloshing around," Leon Westgate,...
In our bi-weekly zinc price outlook and forecast, we take a look at the most recent trends for the metal's LME price and where they may be headed. Although zinc and lead have proven to be two outliers in the base metals sector and actually shown upsides lately, it's been a rather terrible March for prices. What is the specific level you should watch for before making a buying move?
Zinc producers, along with investors, have been hoping for a supply crunch to materialize after repeated warning of mine closures and predictions of ore shortages, but supply has remained stubbornly robust. Pool 4 Tool's Automotive SRM Summit As recently as October, the International Lead and Zinc Study Group (ILZSG) was predicting a zinc deficit for this year of 366,000 tons, a figure more than halved to 151,000 tons this month, and itself still higher than a recent Reuters poll predicting a 143,000-ton deficit for the year. Overall, about a million tons of supply will eventually be taken out, Robin Bhar of Societe Generale predicts, but one unknown is how much mothballed production could come back onstream. New Mining Coming Online At $2,200 per metric ton most miners are operating profitably, a 10% rise (we have seen this much already over...
My colleague Raul de Frutos often says fundamentals are not relevant when looking at short-term price direction. It is the trend you have to follow, and for those in the zinc market the last six months have been as good an example of that as any. Free Download: Cost Certainty for International Zinc Trades The underlying fundamental narrative for zinc has been a market on the cusp of deficit for the last two years. The looming closure of major mines Brunswick and Century has fueled a bull story that the zinc market is going into a supply deficit and prices would rise as a result.As recently as January this year, HSBC was saying the market is already in deficit and will get worse as this graph from their Quarterly Metals & Mining Review illustrates. So Where's That Deficit? The World...
On December 22, zinc futures traded close to 1% lower, representing an overall weak global trend for it and other metals. On the London Metal Exchange, zinc dropped by 0.7% with analysts attributing the bearish turn of zinc futures trade to a weakness in copper and other base metals in the global markets. The reason? Questionable sustainability...
LME Week has generated nearly as many opinions on the prospects for metal prices as attendees last week and it’s little surprise that, after a dismal year for producers and an unexpectedly benign year for consumers, metal prices showed little prospect of rising. That is before some fairly substantial production cuts announced by Glencore took the market by surprise. Free Sample Report: Our Annual Metal Buying Outlook The loss of some 675,000 metric tons of production next year from the planned closure this year of Century mine in Australia and Lisheen in Ireland have been superseded by news that Glencore is closing 380,000 mt of capacity at Mt. Isa and McArthur in Australia, another 80,000 mt at Iscaycuz in Peru and some 40,000 tons in Kazakhstan. That’s half a million metric tons of cuts from a market that was predicted...
The long-term narrative for Zinc is one of closing old mine capacity, limited new mine additions and continued demand growth resulting in a market deficit – at some point. FREE Download: The Monthly MMI® Report – price trends for 10 metal markets. The debate is when. The World Bureau of Metal Statistics puts the market narrowly still in surplus to the tune of just 38 kilotons from January to April, but that’s fairly consistent with their estimation for last year as a whole of 114 kilotons. The International Lead and Zinc Study Group (ILZSG), meanwhile, is reported by Reuters to estimate the world outside China to have a 138-kiloton surplus for the first five months of this year, down from 244 kilotons for the same period last year.
The Midwest aluminum premium has risen as fears about costs set in after Alcoa's announcement that it is shuttering much of its North American smelting capacity. Despite cuts in China, zinc is still massively oversupplied. Midwest Premium Rises on Alcoa Shutdowns Announcement The US Midwest aluminum premium has risen to its highest level in six months, traders told Reuters on Tuesday, but the current forward curve and Alcoa's plans to save a US smelter from curtailment were seen pressuring prices in the near-term. Free Sample Report: Our Annual Metal Buying Outlook The premium, paid on top of London Metal Exchange (LME) futures prices for physical delivery in the US, has risen to around 8.75 cents a lb., the traders said, citing the continued impact of Alcoa's plans to shutter the bulk of its US smelting capacity, announced Nov. 2. Chinese...
It’s been a bearish year for zinc prices, but last month’s Glencore announcement that 500,000 metric tons of mining cuts saw a brief glimmer of price increases… only to drop back down to a new six-year low. According to a report from Reuters, last week, the London Metal Exchange (LME) zinc price reached a new six-year low of $1,497.50...
The African nation of Zambia has sought India’s co-operation in the field of zinc and other non-ferrous metal mining and production. Zambian Vice President Guy Scott, who was on a visit to India recently, expressed his nation’s wish to strike a deal on this front with India. Scott also visited the Hindustan Zinc Ltd (HZL)...
Recently we wrote about how zinc and lead were struggling to rally. Just three weeks later, both these metals are testing new lows. Free Download: Latest Metal Price Trends in the June MMI Report June was an even worse month for base metals but these this pair fell particularly hard. [caption id="attachment_71013" align="aligncenter" width="500"] 3-month London Metal Exchange Zinc price, one year out. Source: MetalMiner.[/caption] Zinc fell 9% in June, or 15% since May and just hit a 14-month low, driven by the bearish sentiment afflicting industrial metals. [caption id="attachment_71014" align="aligncenter" width="500"] 3-month London Metal Exchange lead price, one year out. Source: MetalMiner.[/caption] Similarly, lead fell 7% in June and 16% since May, sending the metal near its lowest level in five years. What This Means For Metal Buyers Two of the best performers among base metals got hit hard...