ZFX - Zinifex Limited

[roland]

possibly people are selling down ZFX after JBM takeover offer was made?? Possibly they held ZFX hoping it was a takeover target? It will take a while now for the next takeover..
Who knows what the punters are thinking on selling it down...

Well, this long term ZFX punter dumped it through disappointment with performance. Traded and held for 6 months looking for a bit of a run up for ex dividend which didn't happen. It was obvious post ex dividend it was going to tank, so sold out. Ex div, and yes it tanked - in a major way, it fell 2 x the dividend value - what a dog.

Zinc prices are down and a zinc surplus pending. ZFX has no new resources yet and has sold off a very profitable part of it's business. The results of the sell off were certainly not spectatcular and fell short of my expectations. Broker consensus has it valued at around $17.50 (Aegis and others).

Laclans chart shows a cycle likely to bring it down to $15.45 - so I am not surprised people are dumping - there are better opportunities around. The punters who did well from the dividend probably dumped after ex div to find something with a brighter short term future - just like me.

 

[vishalt]

What is this Zinc surplus people are talking about, I don't get it D:!

Go to LME or kitco.com, Zinc supplies are PLUMMETING, I've noticed Zinc go from 120k to 60k, the facts are speaking for themselves, its a pity that this stock and the whole Zinc story is dominated by speculating hacks.

 

[uhu]

And, of course, the China story...

In the last years analysts always underestimated the growth of China, so, I think China (India etc) will need more metal in the future than most of analysts think now.
Well, yes, there are a lot of article about the growth of supply (because higher prices allow to mine in less profitable mines). But, but...zinc is an important metal, attached a bit to iron for ex. And now we can read iron prices will rise 20-30 pc next year...

And, I think it's better to buy new mines/firm instead of keeping smelting assests - if Zfx can find a good one!

(Yesterday lead fall sharply, this can be an other reason of ZFX's share price.)

 

[uhu]

Hey,

a great US economy data...although it will push down shares because rate cut may over, but in middle-term (maybe later) this is maybe one of the best news in the last months.
US locomotive is still alive....US economy need a lot of everything...

(Now european markets can!t decide it is a good or a bad news.)


(US GDP growth is much higher than expected.)

 

[Damuzzdu]

What is this Zinc surplus people are talking about, I don't get it D:!

Go to LME or kitco.com, Zinc supplies are PLUMMETING, I've noticed Zinc go from 120k to 60k, the facts are speaking for themselves, its a pity that this stock and the whole Zinc story is dominated by speculating hacks.

Vishalt,

This is surplus the market is talking about....

ILZSG forecasts zinc market to shift to surplus next year

Metals Insider - 2007-10-09

The International Lead and Zinc Study Group (ILZSG) said it expects the global refined zinc market to record a supply-demand deficit of 47,000t this year before recording a surplus of just under a quarter of a million tonnes next year.

The forecast was made following a meeting last week of the Group’s Statistical and Forecasting Committee.

Global demand is seen rising by 3.0% to 11.38 million tonnes this year and by 5.1% to 11.96 million tonnes in 2008. Growth will largely be determined by China, where usage is expected to rise by 8.8% this year and by 12.1% next year.

Mine supply is expected to grow by 7.4% to 11.18 million tonnes this year and then by a faster 9.5% to 12.24 million tonnes next year.

Global refined zinc metal production is forecast to increase by 5.9% to 11.32 million tonnes this year and by 7.8% to 12.2 million tonnes in 2008.

The ILZSG noted that the latest Chinese trade data suggest that net imports of zinc concentrates and net exports of metal will rise sharply in 2007. More concentrates will be imported next year but exports should hold this year’s levels as domestic demand soaks up more metal, according to ILZSG.

and a more insight........


METALS INSIDER
Z I N C & L E A D

MI WEEK IN REVIEW: Zinc holds on…for now

Metals Insider - 2007-10-29

MI WEEK IN REVIEW: The bear grip on LME zinc remains firmly in place but 3-month metal is still holding in there…just. It was helped last week by a general indecisiveness across the entire industrial metals complex. London locals were taking their cue from global stock markets, which were initially in thrall to the potential for an anniversary repeat of the 1987 “Black Monday” meltdown and then, when it didn’t happen, to the growing number of big financial houses taking Q3 write-downs against the sub-prime debacle in the US.

Risk aversion has once again become the watch-word, while the metals market can’t make up its collective mind how to balance out a slowing US economy and a still-exuberant Chinese economy. The fact that the LME’s bellwether copper contract closed the week out unchanged pretty much said it all.

LME zinc didn’t fare quite as well, closing the week out at $2,900/tonne, representing a week-to-week loss of $55. However, it managed to defy the many technical traders looking for a break of the $2,850 level to trigger a collapse back to the September lows at $2,700. Twice it lurched through $2,850””once on Wednesday and again on Thursday””but without giving the many bear chart-followers the satisfaction of an ensuing meltdown.

It’s possible that the general round of risk aversion may have played a part since speculative players have been overwhelmingly playing zinc from the short side. That said, however, our fund-watching friends have noted no significant reduction in the collective short position held by the CTA systematic fund community””it remains around 70% of potential capacity.

Technical players have it in for this market and a lot of fundamental-oriented analysts are minded the same way.


The market collectively groaned when Apex Silver Mines announced early in the week the first shipments of zinc concentrate from the giant San Cristobal mine in Bolivia.

San Cristobal has come to symbolise the wave of new and restarted mine capacity that is shifting the zinc concentrates market to surplus in double-quick time. That’s because with anticipated production of 182,500tpy it is by far the biggest single addition to mine supply.

But it is far from being the only one. Australia’s Perilya is one of the many small to mid-sized players ramping up zinc production. It reported Q3 07 production of 35,700t, up from 25,600t in the previous quarter with the increase reflecting the new Beltana mine. More is to come with the company’s Potosi mine producing its first development-stage ore in the period.

The International Lead and Zinc Study Group (ILZSG) calculates that mined production rose by a fast 8.0% year-on-year in the first eight months of 2008 with refined metal production up by 7.7%. Global usage, by contrast, is estimated to have grown by a far more modest 3.5% in the same period.

The Group still assesses the global refined zinc market as being in overall deficit in the Jan-Aug period, albeit to the tune of a modest 28,000t. However, what made us and other analysts sit up was its calculation that August itself represented a 6,600t surplus.

These underlying trends all seem to be pointing in the same direction and day-to-day sentiment in the market has not been helped by the stabilisation in LME zinc stocks after their long downtrend””up a net 1,625t last week following on from the previous week’s 1,775t rise.

The nearby market structure is starting to reflect this tentative turnaround in visible stocks movement, the contango on the benchmark cash-to-3-months period widening to $12.00 at Friday’s valuations from $2.00 the previous week.

It’s worth stressing, however, that this is still a tentative process. The impact of new mine supply is still being partly offset by production problems elsewhere. Both Kazakhmys and Grupo Mexico reported lower Q3 mined production with the former also reporting sharply lower refined metal production due to ambient heat problems with its smelter.

There is also the thorny issue of China. The country is currently hoovering up concentrates at an accelerating pace. Imports of 294,000t in September were a record all-time high…for the second consecutive month.

So far, however, what is going in as raw material is not coming out as refined metal. The country swung back to being a net importer of zinc metal in September, albeit by a highly marginal 704t.

With its concentration of excess smelter capacity, China will play the key role in determining when, and the consensus is still that this is a question of “when” not “if”, concentrates surplus translates into refined metal surplus.

This being China, there is a whole gamut of views as to how the country’s domestic market dynamics will play out. However, analysts at the state research house Antaike, have been quoted as saying they are looking for Chinese exports of zinc to increase from around 50,000t this year to 150,000t next year. They also suggested that the country will see a major (200,000t) inventory increase in the coming period. Were this to find its way onto the international market, the negative impact would be clearly much stronger.

As we’ve said before in this column, we’re not yet in a period of palpable large surplus and although everything seems to be suggesting we’re heading that way in 2008, there remains the possibility for zinc to defy the doomsayers in the short term, even if the spark will probably come either from the likes of copper or from the macro environment, for example in terms of further dollar weakness.

There was no such spark last week. As such the massed technical bears are still sitting pretty, convinced in their own minds that time has run out for this market.




Cheers
Muzza

 

[uhu]

Well, every miners went up significantly...and Zinifex almoust fall. I do not understand. Other zinc producers, etc Teck rose (although Kagara fall).
I checked commodity prices: lead went up (most of metal did this), but zinc didn't.

I hope the management will not wait for the decesion of acquisitinon for February.
First, it would be fine for ZFX's share price in short-term I think,
Second, other firms will be more expensive in February than now. So, I think they have to step before the end of the year.

 

[Nyden]

Well, every miners went up significantly...and Zinifex almoust fall. I do not understand. Other zinc producers, etc Teck rose (although Kagara fall).
I checked commodity prices: lead went up (most of metal did this), but zinc didn't.

I hope the management will not wait for the decesion of acquisitinon for February.
First, it would be fine for ZFX's share price in short-term I think,
Second, other firms will be more expensive in February than now. So, I think they have to step before the end of the year.

It would be foolish of ZFX to make an aquistion based purely on keeping the price high ; they're not an explorer, you know.

I'd like for them to start acquiring too, or at least go into some talks, but - if they can save a lot of money, or buy at a better time; they're of course going to.

 

[YELNATS]

I hope the management will not wait for the decesion of acquisitinon for February.
First, it would be fine for ZFX's share price in short-term I think,
Second, other firms will be more expensive in February than now. So, I think they have to step before the end of the year.

It would be foolish of ZFX to make an aquistion based purely on keeping the price high ; they're not an explorer, you know.

I'd like for them to start acquiring too, or at least go into some talks, but - if they can save a lot of money, or buy at a better time; they're of course going to.

I would expect that Zinifex would have their acquisition plans/projects well-advanced by now, and just awaiting finalisation before they are annouced..

I don't think they would have waited for the Nystar deal to be done and dusted before they turned around and said "um, let's see now, who can we acquire?"

Surely, they are more professional than that.

 

[Nyden]

I would expect that Zinifex would have their acquisition plans/projects well-advanced by now, and just awaiting finalisation before they are annouced..

I don't think they would have waited for the Nystar deal to be done and dusted before they turned around and said "um, let's see now, who can we acquire?"

Surely, they are more professional than that.

Hmmm, it isn't an issue of professionalism; but rather, keeping their options open. I'm sure they have targets, but to say they're well-advanced seems a stretch.

Hey, I'd love to be wrong here though ZFX makes up a hefty part of my long-term portfolio

I just hope they acquire something already producing; like OXR for instance!

Having cash really doesn't do much for a stock like this, they should replace the earning power they sold, & soon.

 

[legs]

Hmmm, it isn't an issue of professionalism; but rather, keeping their options open. I'm sure they have targets, but to say they're well-advanced seems a stretch.

Hey, I'd love to be wrong here though ZFX makes up a hefty part of my long-term portfolio

I just hope they acquire something already producing; like OXR for instance!

Having cash really doesn't do much for a stock like this, they should replace the earning power they sold, & soon.

Why couldn't they be well advanced?..They probably own at least 20% of their targets stock and had talks already with them, unless they are taking the silent raid option. These things dont just happen overnight.

Another possibility of the low price is a Company selling down their share of ZFX to lower the stock price so a lower takeover offer can be made, thoughts?

 

[YELNATS]

Hmmm, it isn't an issue of professionalism; but rather, keeping their options open. I'm sure they have targets, but to say they're well-advanced seems a stretch.

Hey, I'd love to be wrong here though ZFX makes up a hefty part of my long-term portfolio

I just hope they acquire something already producing; like OXR for instance!

Having cash really doesn't do much for a stock like this, they should replace the earning power they sold, & soon.

Agreed and understood. I would think that the Nystar deal is part of a wider, long-term strategic plan for the company, maybe leading to acquisitions and diversification. ie. not an end in itself.

 

[blablabla]

If a t/o target can be identified then there might be more short-term upside in investing in the target rather than in Zinifex, if you can pick it before any move is made.

Potential targets may or may not be producers but they would probably have large ore resources. Targets could be zinc miners or they could provide diversification to Zinifex, e.g. the reported Oxiana negotiations which seem to have fallen through. Any guesses?

Another way that Zinifex can add value is by spending on exploration and development. They have a wide variety of exploration projects and if they can find a big new ore body then developing it is likely to deliver better returns than paying for an existing company.

 

[uhu]

Metal's prices fell. Zinc, copper are much cheeper than few months ago.

Well, if it will be continued, it will impact to the profitability of some weeker mines worldwide.
So, ZFX must look for targets have low-cost mines. I think this aspect is more important than 6 months ago.

 

[legs]

Metal's prices fell. Zinc, copper are much cheeper than few months ago.

Well, if it will be continued, it will impact to the profitability of some weeker mines worldwide.
So, ZFX must look for targets have low-cost mines. I think this aspect is more important than 6 months ago.

KZL is a big chance at being a target... watch out for the move on it. They have some good prospects.

 

[uhu]

KZL is a big chance at being a target... watch out for the move on it. They have some good prospects.

Well, maybe yes, but I think ZFX should diverificate itself. Zinc and lead...the same. Well, this can be also a logical way, but if zinc prices will fell more and more, it would be dangerous for Zinifex. (Or not, if trend will change, of course).

Well, Lynas is also a specific miner...interesting.


But Zinifex says they would enter to the copper and gold market, so, Oxiana or a non-aussie copper-gold miner is more likely. I have OXR shares too, so I would vote for Oxiana.

 

[vishalt]

Do you trade from Hungary Uhu?

Zinifox would be a pretty cool name for a merger between Zinifex and the Oxiana.

 

[Nyden]

Well, maybe yes, but I think ZFX should diverificate itself. Zinc and lead...the same. Well, this can be also a logical way, but if zinc prices will fell more and more, it would be dangerous for Zinifex. (Or not, if trend will change, of course).

Well, Lynas is also a specific miner...interesting.


But Zinifex says they would enter to the copper and gold market, so, Oxiana or a non-aussie copper-gold miner is more likely. I have OXR shares too, so I would vote for Oxiana.

It's already known that it is ZFX's intent to branch out into copper, & nickel.
They won't be looking to buy more zinc, that would be moronic of them.

Which is still why I believe OXR is a target, & they probably already own a piece of them already from the last talks.


Speaking of which...

There is now fresh speculation that Oxiana will seek a merger with zinc miner Zinifex, which is about to reap $1.5 billion in proceeds from the European float of its smelters at Nyrstar. Zinifex is also without a CEO as it still seeks a replacement for Greig Gailey, who left in June.

Speculation of a merger was stoked yesterday by a research note from Credit Suisse, which sees Zinifex as a logical fit for Oxiana. "We believe that Zinifex is a logical incremental step towards achieving Oxiana's growth vision," the note said.

Taken from http://www.theaustralian.news.com.au/story/0,25197,22694191-5005200,00.html

 

[uhu]

Do you trade from Hungary Uhu?

Zinifox would be a pretty cool name for a merger between Zinifex and the Oxiana.

"Zinifox" ))
Very good. Please recommend it in ZFX's homepage...but what does Mr. Hegarthy say?

Yes, yes, I am hungarian and I live in Hungary...

OFF

Now I have a normal broker (not online), but I look for other possibilities, because it's difficult to trade at aussie market, my broker firm closes at about 5 pm and opens at 9 am, so, it close before aussie market opens and it opens after aussie market closes..

So, I checked Saxobank, it's not bad, although commission is a littlebit high (I think 40 aud/transaction), It's more expensive than my other online brokerfirm (comission 10Euro or 10 USD, but only in Xetra and USA). So, do you know other?

 

[Lert]

Hi there uhu.. this is very off topic but I see your countryman Peter Besenyei has set the best qualifying time in the Red Bull air races in Perth this afternoon.. hope he goes well tomorrow

 

[uhu]

OFF

Hi Lert from Perth,

Thanks! And Talmácsi (other hungarian) can be the Moto GP champion tomorrow! I hope Mark Webber will have better result at the next F1 season.