Before we get to our zinc price outlook for the first part of 2014, let’s refresh ourselves on some historical context.
After the Great Recession of 2008, zinc prices rocketed up, eventually reaching a new peak in June 2010. Prices went down and then back up again until 2011 when zinc prices were pushed down by the price drop in the industrial metals sector.
Since the last quarter of 2011, zinc has been trading sideways. Indeed, for the past 2 years and change, the 3-month zinc price on the LME has traded between $2,200 and $1,800 per ton.
Looking at the short-term picture, zinc has been gaining modest support since May 2013. However, over last month, zinc prices sharply increased by 14 percent – quite a big rise compared to the previous price levels seen during the last months:
What This Means for Metal Buyers
After the rise experienced last month, we expect zinc to establish itself within new higher levels during the next weeks, somewhere in the trading range of $2,000-$2,120 per metric ton. We at MetalMiner are rather neutral on zinc for the balance of 2014; a price increase above $2,200 per ton will be a bullish signal, whereas a breakout of $1,760 per ton will be very bearish for base metal.