# Zinc - Where is it going?



## brerwallabi (13 November 2005)

Have a look at the chart. has zinc had its day, I am holding kagara(KZL),perilya(PEM) and just got out of CBH before it collapsed, the chart shows the zinc price takes off approximately July for the past few years and drops off about January although there is a longterm trend up. It also looks like its in the last stage of an Elliot Wave cycle maybe there is still a little bit more to go in zinc but I think I would be getting a bit nervous in a few weeks time.


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## rederob (21 February 2019)

brerwallabi said:


> Have a look at the chart. has zinc had its day, I am holding kagara(KZL),perilya(PEM) and just got out of CBH before it collapsed, the chart shows the zinc price takes off approximately July for the past few years and drops off about January although there is a longterm trend up. It also looks like its in the last stage of an Elliot Wave cycle maybe there is still a little bit more to go in zinc but I think I would be getting a bit nervous in a few weeks time.



KZL and PEM are reminders of our fickle mining industry - neither no longer trade.
However, I am of the view that we are entering another strong cycle for metals and zinc is a metal likely to ride higher over the next year, at least.
Begin here.
Next, this link should copy the LME pdf fact sheet directly to your PC (look for the new tab link on bottom left of screen).
It's not hard to see zinc prices climb over 30% higher in the next year or so.
This link is to present and historic LME prices and warehouse levels.


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## Ann (25 February 2019)

Reading this article seemed a bit confusing, on the one hand they say the price could drop because of lack of smelting facilities and yet on the other hand they are saying inventories are very low which I would have thought would tend to have an upward pressure on price. 

*Too Much Zinc Has Miners Begging for Smelters as New Mines Open*

The price of zinc appears to be traveling in a rising range channel for a few months on a five year view chart.
If you look closely you may be able to see a fully formed head and shoulders formation and if it resolves as in a textbook description there might be a bit of a fall sooner or later. Interesting to watch.


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## peter2 (25 February 2019)

@rederob Thanks for the additional info re zinc.
I noticed on the WE that the base metal ETF (DBB) was close to breaking higher. 




I notice that stockpiles have been decreasing for the past 5 years yet price has also fallen. Has industry replaced zinc with other metals and is therefore not used as much? Interesting.


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## rederob (25 February 2019)

peter2 said:


> I notice that stockpiles have been decreasing for the past 5 years yet price has also fallen. Has industry replaced zinc with other metals and is therefore not used as much? Interesting.



No, zinc is in a fashion a better indicator than copper for industrial activity as it has few uses outside of it.  Copper is being driven higher by the marginal additional, yet increasingly greater, demand from EVs.
LME warehouse levels are useful in that they give a clue as to what is really happening at a global scale.  While reading the media does not tell you that things are rosy, the reality for base metals is that there has been a consistent decline for many years, and this trend does not look like reversing any time soon.  It probably means that "the rest of the world" - ie the nations we seldom hear about, are collectively picking up the slack from first world economies.
While Anne suggests a possible decline in zinc on technicals, I reckon $4000/tonne is in prospect within 2 years, based on fundamentals.


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## Ann (25 February 2019)

rederob said:


> While Anne suggests a possible decline in zinc on technicals, I reckon $4000/tonne is in prospect within 2 years, based on fundamentals.




It got to around 4500 in 2007 which was a high as it ever got. Next highest was  3500 in 2018, I would not be surprised if you were right about the price Rob.

Here is a 10 year chart with some support lines on it. I reckon tested support lines will trump a chart shape any day. Plus I can only ever remember a head and shoulders pattern resolving downward when it was in the all time high price level. This is not in its all time high. So bottom line from me I am more bullish than bearish on Zinc.


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## Smurf1976 (25 February 2019)

Ann said:


> Reading this article seemed a bit confusing, on the one hand they say the price could drop because of lack of smelting facilities and yet on the other hand they are saying inventories are very low which I would have thought would tend to have an upward pressure on price.



There's really two markets here. Price of the ore and the price of refined metal.

If the smelters are the bottleneck then price of ore goes down, since the smelters are the only actual consumer of unrefined ore, and price of the refined metal goes up due to inadequate supply.

There's two basic processes for refining zinc - thermal and electrolytic with the latter producing a higher level of purity.

In the Australian context Nyrstar in Tasmania is the third largest electrolytic zinc smelter in the world (at least it was not long ago so presumably nobody's built a bigger one recently) and produces refined zinc in two main grades - 99.95% and 99.995% pure as well as alloyed products. Production at this plant is about 260,000 tonnes per annum of zinc with operations running constantly 24/365.

Main inputs to production are zinc concentrate (ore) + huge amounts of electricity + also lots of water. Outputs are primarily zinc and sulfuric acid (by mass there's actually more acid than zinc produced) with much smaller volumes of various other metals. 

About 30% of the ore processed at the plant in Tas is from mines on the state's West Coast, the remaining 70% being from interstate or overseas.


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## Ann (25 February 2019)

Smurf1976 said:


> There's really two markets here. Price of the ore and the price of refined metal.
> 
> If the smelters are the bottleneck then price of ore goes down, since the smelters are the only actual consumer of unrefined ore, and price of the refined metal goes up due to inadequate supply.




Right! Got that, thanks Smurf. So that means the refiner is going to be the big winner here? Buy low, sell high.




Smurf1976 said:


> In the Australian context Nyrstar in Tasmania is the third largest electrolytic zinc smelter in the world (at least it was not long ago so presumably nobody's built a bigger one recently) and produces refined zinc in two main grades - 99.95% and 99.995% pure as well as alloyed products. Production at this plant is about 260,000 tonnes per annum of zinc with operations running constantly 24/365.




Darn Nyrstar are only listed on the Euronext Brussels exchange, not in Australia. Interesting to see they have two processing plants in Australia. They have seven plants worldwide. I guess they would be able to hold the Zinc industry to ransom if they so desired.


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## peter2 (19 April 2020)

If you're interested in the outlook for zinc prices then the recent NCZ Quarterly results presentation (15/4/20) is an interesting read. 

The COVID-19 pandemic is shutting down mining operations all over the world. This may cause price increases in commodities that are in limited supply. I anticipate that these price increases are only temporary and will settle back at normal levels once production resumes. The companies that may profit from these price increases are those that can stay operating during the pandemic shutdown. These companies won't profit from the price increases if they've hedged their future sales at lower prices. 

It's still a crap shoot out there and that's why the earnings reports and future guidances will be intensely analysed.


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## Sean K (18 October 2021)

Zinc is flying. Interesting explanation here:


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## frugal.rock (13 January 2022)

Zinc, not just for cricketers noses...  my zinc play is NCZ.


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## frugal.rock (5 March 2022)

MZNc1 code on UK metals market.
Update. It's banging up there...


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## rederob (5 March 2022)

rederob said:


> While Anne suggests a possible decline in zinc on technicals, I reckon $4000/tonne is in prospect within 2 years, based on fundamentals.



We were both right Ann:


There's no supply crunch for zinc, unlike copper and nickel.  It's just jumped on the current commodity bandwagon.
A fall back to the longer term average range of $2500 to $3000 is likely once this bull run is over.


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## rederob (4 April 2022)

About to break the previous record price:


I see $5500 as the target price.


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## frugal.rock (4 April 2022)

rederob said:


> There's no supply crunch for zinc,



Is this still the case?
(NCZ had stated early covid era that half of the top ten zinc mines worldwide had closed due to covid. )
I imagine they are all up and running again... but I would've thought that would cause a shortage and price rise?

I notice in retail, there is opportunistic price rising going on...

Maybe the price is going up from smelting costs rising...?
I remember smelter costs went down to encourage more business when mines were closed.


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## rederob (5 April 2022)

frugal.rock said:


> Is this still the case?



Copper and nickel are especially affected by the new energy vehicle market which places incremental demands over their typical useage.
As I see it zinc has no special additional demand drivers, and is reacting to industrialisation in the usual way.  As a metal it's not particularly sexy so, unlike gold or nickel, miners to not especially set out to discover and mine it.


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## rederob (13 April 2022)

Zinc remains in strong backwardation:


Here's a lot of the reason...


So when you see the headline figure of 120k tonnes in LME warehouses, remember that almost 75k tonnes is spoken for.


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## frugal.rock (13 April 2022)

Earlier in the plandemic, not enough supply from mines, but smelters lowered prices to attract tonnage.  Lower energy costs then.

Now, energy costs through the roof. Smelting costs probably reacting to that as well?
LME levels as per Rob post.


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## Sean K (14 April 2022)




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## frugal.rock (16 August 2022)

Zinc, risk on...
Popping on the hourly, not sure why yet.




Solid up trend on the weekly (and daily, not shown)


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## frugal.rock (16 August 2022)

Further to the above from late June....




From this article









						Column: Zinc's turn to feel the squeeze as LME stocks evaporate
					

London Metal Exchange (LME) zinc stocks have been raided this week, leaving available inventory close to depletion.




					www.reuters.com
				




Perhaps the squeeze is now really biting. Prices may have to skyrocket for smelters to do their thing with energy as it is.
I guess we will hear something official "soon"...
EDIT, that will do it, a big smelter halting. See below post.


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## frugal.rock (16 August 2022)

Zinc Surges as Trafigura-Owned Smelter to Halt Production​
Prices climb more than 7% on LME after announcement by Nyrstar
Nyrstar’s Budel smelter is one of Europe’s biggest zinc plants



			Bloomberg - Are you a robot?


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## greggles (16 August 2022)

Another bullish article.









						Exploring zinc, the unassuming green metal
					

Zinc is becoming more and more important in the green transition. We take a closer look at its renewable energy future.




					www.australianresourcesandinvestment.com.au


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## frugal.rock (Monday at 10:54 PM)

China reopening. Industrial metals rallying.
Could have a cracker rally here if it sticks to recent trend of higher highs, higher lows with widening crescendo channel to the upside.
Or is it beware of the 3rd wave?


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## frugal.rock (Tuesday at 2:08 AM)

Wowhead


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