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[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...
Remember when Barack Obama defeated republican presidential nominee Senator John McCain? Or Usain Bolt's first appearance in the Olympic games? Well... that's how far back you need to go if you want to see zinc prices as high as they are now. MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy Last week, zinc closed just short of $2,300 per metric ton on the London Metal Exchange, the highest level since early 2008. Zinc is the first industrial metal we can say that about (and possibly not the last one). [caption id="attachment_82119" align="aligncenter" width="500"] Zinc hits an 8-year high. Source: MetalMiner analysis of Fastmarkets.com data.[/caption] Zinc markets moved into deficit this year following the shutdown of some big mines. The International Lead and Zinc Study Group (ILZSG) anticipates that global usage in 2016 will exceed production by...
After a ballistic missile-like climb this year, zinc prices finally felt some selling pressure in October. The metal declined 8% in just two weeks. [caption id="attachment_81441" align="aligncenter" width="500"] Zinc prices fall in October. Source: MetalMiner analysis of Fastmarkets.com data.[/caption] Why did prices fall this month? Is zinc's bull run coming to an end? MetalMiner Price Benchmarking: Current and Historical Prices for the Metals You Buy Zinc rose pretty fast this year. Such was the rate of advance in prices that zinc only needed some news to be the trigger for what was always in the cards technically. Moreover, zinc is at levels that prices couldn't overcome in 2014 and in 2015. This is a level where it's normal to see some selling pressure. Finally, in October zinc got the news that triggered selling: [caption id="attachment_81452" align="aligncenter" width="500"] Zinc faces long-term...
The International Lead and Zinc Study Group‘s recent Portugal session revealed global demand for refined zinc metal will increase a little more than a half percent this year, to be followed by a larger increase of 2.1% in the coming year. In the Far East, China’s renewed demand from the automotive sector will offset the decline...
Zinc prices are back above $2,000 per metric ton, their highest level in almost a year. The metal has gained over 25% since the start of the year, defying other metals such as copper, nickel or lead, which have barely moved up this year, amid overcapacity concerns. Two-Month Trial: Metal Buying Outlook We noticed zinc's potential earlier this year and markets gave enough reason for buyers to place forward buys over the past few months at lower prices. [caption id="attachment_79217" align="aligncenter" width="500"] Three-month zinc climbs above $2,000. Source: FastMarkets.com.[/caption] Zinc investors have been drawn in by a narrative of mine closures and a resulting tightening of the supply chain. As the zinc prices weakened over the past three years, more than 1.5 million mt of mine capacity was either idled or closed permanently. Free Download: The May 2016 MMI Report...
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.
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 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,...
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 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...
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?
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...
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...
Just last week, zinc prices experienced a tough couple of days as the London Metal Exchange (LME) three-month price fell by $100 per metric ton. According to a report from Reuters, this has been an interesting month for zinc as the metal previously hit a five-year high earlier in October. Its slide can be attributed to news...
I'm really tired of hearing the word "bull market" every time some metal rises in price by 20%. Free Download: The February 2016 MMI Report The common definition of bull market is an increase of 20% from a low and that, to me, is a very bad definition. However, even well-known sources such as The Wall Street Journal or Bloomberg keep using this definition, which only demonstrates a complete lack of understanding of what a bull market is. We saw this when the WSJ called bull market on China's stock market and last week Bloomberg declared a zinc bull market. [caption id="attachment_77220" align="aligncenter" width="500"] 3-month London Metal Exchange Zinc. Source: MetalMiner analysis of Fastmarkets data.[/caption] Is Zinc in a Bull Market? You don't have to be a hedge fund manager to realize that there is nothing bullish in zinc's chart....
A recent report from the International Lead and Zinc Study Group found the global market for refined zinc was in deficit from January to July, with total reported inventories declining over the same time frame. Global zinc mine production declined 6.1% during the same period, which mostly was due to substantial reductions in India, Australia, Ireland and...
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,...
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...