ZFX - Zinifex Limited

[Freeballinginawetsuit]

Well, here you go, this is the kind of stories that will drop ZFX share price to the floor:

http://www.bloomberg.com/apps/news?pid=20601012&sid=aAwbyHD48Huo&refer=commodities

So you can easily say that there is no Chinese story running anymore for Zinc/Zinifex. Chinese is exporting Zinc and will keep doing it through 2007.

Jan. 29 (Bloomberg) -- China, the world's biggest producer and user of zinc, was a net exporter of the refined metal in 2006 for the first time in three years, reducing global supply concern that pushed prices to records.

China exported 7,000 metric tons more refined zinc than it imported last year, and the country may be a bigger net exporter in 2007

WBII

So China's Zinc exports outweighed imports in 06 by 7000 tonnes, yet Zinc LME inventories were critical for most of the latter half of 06 and the spot price more than doubled in 06. Imagine the scenario if China couldn't balance imports/exports of Zinc.

Its not as if the Chinese are all that keen on the prices theyve been paying for the raw commodities fuelling their boom, to date they have been hung out to dry. Who knows how keen they are on reporting accurate data anyway!

This paragraph is taken out of the same article, seems to be saying they like importing raw materials, on the other hand it could be a chinese riddle, lol

``It is not likely that China will be a large net exporter of zinc,'' Zhou Guobao, director of the lead and zinc division at the China Nonferrous Metals Industry Association, said in an interview in Beijing Jan. 25. ``The government wants more imports and fewer exports of resources.''

Seems to contradict the article or maybe they just used Import/Exports in the wrong context

 

[chops_a_must]

Seems to contradict the article or maybe they just used Import/Exports in the wrong context

Possibly just encouraging internal use?

 

[Freeballinginawetsuit]

Yep their probably conserving their resources lol, or run out of baskets to move the ore and waiting a few years until they can build dump trucks.
I think they are only able to build motor bikes ATM and even those break after a couple of months.

Ahh...... our parents were telling these jokes about the Japanese a generation back "Jap Crap" and look how far they have come, all their plants are in China


A footnote: 6 years ago the Chinese on large scale concrete pours used to mix the ag and cement with Loaders in-situ on the ground. Absolutely a true story, I saw it with my own eyes real 'stoneage stuff'

 

[toothfairy]

Everyone who does business in China can tell you that is one tricky place to do business in ( I am Chinese by origin, I know) . I also will not give that article any credit, it could just the opposite be true.
Anyway, back to ZFX, don't forget last year when they posted the 1 billion plus profit was on an average Zn price of A$2807. Now it is still @ about A$4600. Profit this year can't be that bad. I don't know about the thud, if I hear it I'll wake up and buy some. Thanks.

 

[misterS]

New to the game, and buying ZFX at about $9.5 last year, I thought this is money for jam and bought some more at about $13.5... Within days, (may have even been the next day) Zfx promptly started a dive to $8 plus. So much for jam, but I still have them and will probably sell them after 12 months. Just because the CGT rate makes such a difference to me, not for analytical timing reasons. I could never develop the technical wizardry displayed by some of the people posting here.

However, I have been avidly scouring the available information about zinc stocks and supply / demand, with everyone from ABARE to Bloomberg and Mining News and every commentator etc. for the past 9 months, while watching the price fluctuate.

Apart from more central considerations, does the fact that Subaru is replacing all aluminium body parts for zinc coated steel from later this year counter-balance Indian galvanized steel makers choosing to make an inferior quality of galvanized steel by using less zinc, I asked myself? Will the buyers of this crappy galvanised product demand better? Will LME run out of zinc altogether, or will the level rise to previous levels? Will China keep on growing at over 10%, with so much infrastructure etc. Will China growth exceed the down turn in US demand? Will Indian zinc production zoom this year?

Read in its entirety, this Bloomberg article is not too startling. Also, I think the ZFX dividends this year and the likely income from the smelter spin-off should sustain a reasonable price at least till the end of the year. That is the extent of my direct interest, but I suspect that strategically, its sustainability beyond its Century mine exhaustion is more a question of the quality of its managment than the zinc price. If you couldn't find something else to dig up and flog within a decade with a billion dollars profit pouring in every year, you would have to ask if you really deserved your share options!
cheers,

 

[drmb]

I will keep holding despite wobbles and obscure articles from China. I read on another post somewhere that the Chinese will export zinc through the begining of the year to try to keep the benchmark price down and then after the Chinese New Year, whammo, they'll lock in the priice before (imo) the price takes off again. Whenever I need comforting I looks at the 5 year LME chart and take comfort that Zinc will not suddenly get cheap as chips.

 

[PhoenixXx]

Seems like it's going to drop even further

 

[BREND]

Seems like it's going to drop even further

Don't worry, zinc price is moving up today.

 

[BREND]

Update on zinc situation:

Fall in zinc price at the end of Dec 2006 and early Jan 2007 is due to rising inventory level. This rise in inventory level is partly due to export of zinc into LME warehouse by China merchants.

However based on current lower price of zinc at LME, China merchants had stopped exporting zinc into LME, as the price of zinc in China is higher compared to that of LME. Hence we see that inventory level has started to fall since mid Jan 07.

We think that market is over pessimistic on zinc, price remains weak even though fundamental of zinc had improved. As inventory level continues to fall, we should be able to see a recovery in zinc price.

Zinc chart shows that a reversal might occur soon:
http://basemetal-trading.blogspot.com/2007/01/possible-reversal-for-zinc.html

 

[Kauri]

Looks like my short will be covered for around 1R...unless she gaps through on open..

 

[toothfairy]

Any intelligent guesses on what price will ZFX trade @ tomorrow? Last time when price of Zn was @ $14 in June/July 06 ZFX was traded @ around $10. There isn't much that we know about the company now that we didn't know about in July 06. Apart from the Umicore deal & some exploration news.
(I am not trying to talk down the ZFX sp, I still own a parcel of it although not as much as 1 month ago! Just want a survey, thanks).

 

[eMark]

It's hard to fathom really. Hopefully somewhat restrained, but I don't think so... i.e I have never seen a 9-12% drop in one day before with Zinc. Somewhere in the vicinity of $15.50 and $16.00 (conservatively).

 

[drmb]

It's hard to fathom really. Hopefully somewhat restrained, but I don't think so... i.e I have never seen a 9-12% drop in one day before with Zinc. Somewhere in the vicinity of $15.50 and $16.00 (conservatively).

Think maybe the instos may dump down to 14-15 (or even lower) to get the littlies like me to panic and then buy back up to 15. Just a hunch nothing to base this on. I'm not going to panic, may top up if goes below 14. Expect it to recover more or less some of the loss after Chinese New Year. Zn is volatile! DYOR etc

 

[toothfairy]

Think maybe the instos may dump down to 14-15 (or even lower) to get the littlies like me to panic and then buy back up to 15. Just a hunch nothing to base this on. I'm not going to panic, may top up if goes below 14. Expect it to recover more or less some of the loss after Chinese New Year. Zn is volatile! DYOR etc

True, we all shouldn't panic, but is it good strategy to sell ASAP and buy back later? Littlies like us have only a few thousand shares to get rid of. Big instos have hundreds of thousands may be millions. By the time they sell enough it will take a few days of decline. Then we can buy back.

 

[Kauri]

I think that a lot of punters guaranteed stops may be hit around the 16 to 16.30 area, other non guaranteed stops will be possibly gapped through. Bargain hunters will be out in force trying to pick the bottom. Big buyers/instos will come in when the dust has settled and the real bottom has formed. My opinion only and I am wrong more often than I am right.
Meantime, just south of perth we burn, some idiot lighting fires, 14 houses gone already.. ... bring back the noose for arsonists..

 

[Kipp]

True, we all shouldn't panic, but is it good strategy to sell ASAP and buy back later? Littlies like us have only a few thousand shares to get rid of. Big instos have hundreds of thousands may be millions. By the time they sell enough it will take a few days of decline. Then we can buy back.

In times of uncertainty (or at least, a downtrend)- apply the "better sleep principle". Will you sleep better or worse holding ZFX? Given that you're still up at 1:30 am thinking about it... maybe better sleep would be had without them?

Not holding ZFX for now- only Zn exposure is though BSM- but Zinc price is starting to keep to me up at night.. .lol

 

[j4mesa]

ZFX Drops is not as bad as Zn prices drop apparently.

I could see a short-term support around 15.95 (lots of buying) or 16 dollars.

 

[drmb]

ZFX Drops is not as bad as Zn prices drop apparently.

I could see a short-term support around 15.95 (lots of buying) or 16 dollars.

Good ann confirms why I will still hold as ZFX as it divests smelters 'n goes exploring "The Drake-Zinifex Alliance applies for an exploration licence covering the Doverstorp Mineral Field in Sweden The Drake (ASX Code DRK) -Zinifex (ASX Code ZFX) Alliance is continuing its acquisition of highly prospective properties in Scandinavia. Drake is pleased to announce that it has applied for an exploration licence that contains the historic Doverstorp Mineral Field in the Bergslagen district of Sweden. The application is 23 square kilometres in area."

 

[Kauri]

The first group of bottom pickers tried at 16, they haven't made a pile, yet, the next group picked 15.90, it will be interesting to see if they come up smelling of roses...

 

[eMark]

The first group of bottom pickers tried at 16, they haven't made a pile, yet, the next group picked 15.90, it will be interesting to see if they come up smelling of roses...

Bottom pickers (huh huh snort snort). Such a horrible phrase :