Amidst the bleak look of the base metal sector, zinc and lead were the only metals showing a little bit of life during the past few months. However, the month of March was bad for both metals.
Zinc decreased by 10 percent on the LME while lead dropped 5 percent. This supports what we have been saying for the past few months – until the base metal sector turns up, it will be hard to see any of them skyrocketing.
We remain rather neutral on zinc for the balance of 2014. In the short-term, prices might bounce back up following normal market fluctuations. In either case, we don’t expect zinc to trade above $2,200 per metric ton, as we commented previously.
What This Means For Metal Buyers
This might be a good opportunity to buy for meeting near-term requirements. However, we wouldn’t suggest zinc buyers begin taking long-term positions, as we don’t see prices trading well above today’s levels.
Until the sector turns up, we expect zinc prices to remain below $2,200 per metric ton.