ZFX - Zinifex Limited

[Nyden]

"China is likely to remove a 5 percent tax rebate on exports of super-high-grade refined zinc from January, while zinc output in the country rose 19 percent in the first nine months of this year."
http://africa.reuters.com/business/news/usnBAN923973.html

Possibly Chinese producers are dumping on the zinc market to cash in on the remaining rebate period.

Saw that article last night, gosh - Zinc is just getting a beating from every angle! Perhaps if companies better hoarded the stuff, & didn't over saturate the market so much we'd have a better price

Well, I'll know what my long-term position will be come Feb-March; if their acquisitions (or have been taken over are positive enough; I'll stick around. If not, I'll be out in the next pre-dividend run

Hopefully by then, we'll know if Zinc truly is doomed as well!

 

[overule]

I think ZFX will keep failing through the end of December given record low Zinc prices . What do you guys think ?

 

[Nyden]

I think ZFX will keep failing through the end of December given record low Zinc prices . What do you guys think ?

I think ZFX held up very well today, all things considering. 3.7% drop was better than I was expecting, to be honest.

I believe if all the M&A rumors fall through, well - ZFX might still yet weather this storm. Although the price of Zinc has been absolutely getting hammered; ZFX has increased their zinc production (obviously, contributing to the zinc price decline!) projections. The bottom line is; they are making money; and with a P/E ratio (not sure exactly) of under 6; I seriously cannot see it falling too much further. Then again, I've been proven wrong before! Many times

This subprime mess has unfortunately created a system were very few stocks have a solid bottom anymore; support levels are fairly easily broken with an awful day.

Although; as always - I am hopeful about the future, despite my dead horse signature!

 

[overule]

The bottom line is; they are making money; and with a P/E ratio (not sure exactly) of under 6; I seriously cannot see it falling too much further. Then again, I've been proven wrong before! Many times

I don't agree with that how can they be making more money by producing more Zinc ? Zinc is at a surplus at the moment, supply outstripped demand

 

[Nyden]

I don't agree with that how can they be making more money by producing more Zinc ? Zinc is at a surplus at the moment, supply outstripped demand

Well, I'm not exactly sure on their specific financials - but, just because there's a surplus doesn't mean miners aren't selling it! It just means they're forced to sell it cheaper. ZFX itself doesn't hold the surplus, that it can't get rid of. (Correct me if I'm wrong though guys

Base metals are traded - unlike Uranium, which is a totally different story. But, there are futures, & everything else with base metals.

 

[overule]

Yes, i agree with that.

Unless there's another speculation, i don't see ZFX rising anytime soon.

 

[legs]

http://www.businessspectator.com.au...wn-LME-slides-98CAB?OpenDocument?OpenDocument

Shanghai copper, zinc limit down, LME slides
Reuters

SINGAPORE -- Shanghai copper and zinc futures fell by their daily limits and support for London futures faded as the appetite for risk shrank and investors bailed out of commodities.

The January copper contract on the Shanghai Futures Exchange fell by its 4 percent daily limit to 55,780 yuan ($US7,513) from Monday's settlement. Copper for delivery in three months on the London Metal Exchange was down 3.2 percent, or $US20, at an eight-month low of $US6,575 after a 3.5 per cent slide on Monday.

"Absolutely brutal" was how Investec described trading on the LME, adding: "The whole base metals complex received a thorough hammering as sustained selling dominated proceedings."

Dealers said copper could fall to $US6,000 if markets fail to stabilise this week.

"We have nudged below support at $US6,800, which suggests more falls to come. If we close below here for the week we could see copper down to $US6,000," a dealer in Hong Kong said.

Angst about credit markets was heightened after Goldman Sachs cut Citigroup to "sell" and said the bank may have to write off $US15 billion against mortgage losses, while Swiss Re , the world's biggest reinsurer, revealed a $US1 billion writedown related to credit losses.

"The concern is that if there are unknown losses still to be recorded, the risk aversion that has been present in markets will remain," said Tony Brennan, equity strategist at Deutsche Bank.

In New York, COMEX copper for December delivery shed 17.80 cents, or 5.6 per cent, to settle at $US2.9835 a lb.

"The fall is mostly psychologically driven, as consumption in China remains stable," said Shen Haihua, an analyst at Maike Futures.

"Some funds have moved their copper positions to far forward contracts in London to avoid some of the risk inherent in the three-month contract," he said, adding that they were gambling that global output would be lower-than-expected due to production problems and higher energy costs.

January's zinc contract was down by its 6 per cent daily limit at 18,205 yuan after falling limit down on Friday and Monday as investors fretted that a rumoured change in Chinese export taxes will leave the country awash with the metal.

Benchmark LME zinc tumbled 3.6 percent or $US85 to $US2,270 a tonne, while lead dropped 2.5 per cent to $US2,965.

"Lead was by far the biggest loser on the day, plummeting by almost 9 per cent as funds liquidated long positions," Investec said.

Lead has come under pressure since Ivernia , which runs the Magellan lead mine in Western Australia, said last week that it was confident that it would get approval to restart shipments from the mine.

Exports of lead concentrate were halted in March due to bird deaths near the port of Esperance possibly due to lead poisoning.

Resource stocks were further pressured by declines in metals prices and worries that demand will be hurt by gathering gloom about the world economy.

Mining giant BHP Billiton fell more than 3 per cent, Korea Zinc slid 7 per cent and Sumitomo Metal Mining fell 4.5 per cent.


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[overule]

So it seems to me like ZFX is really in a worse situation than never before. Zinc and Lead fell terribly.

 

[Nyden]

So it seems to me like ZFX is really in a worse situation than never before. Zinc and Lead fell terribly.

Yes, but they obviously fell a wee bit too far. Seem to be recovering so far, and if we have a positive day in the US we could definately see a proper recovery. (Go to http://www.kitcometals.com/ for current prices)

 

[uhu]

Well, well...some journalist have written maybe there would be a surplus market by zinc...why I didn't beleivet it...

Although ZFX is a good company, this stock was my biggest mistake in this year. I bought it in JUly, before the crash (more than 19 aud) and I should have sell it when it was recovering before the ex-div day.

Now, the situation is very bad...I can only hope the M&A stories.

 

[mneal]

So it seems to me like ZFX is really in a worse situation than never before. Zinc and Lead fell terribly.

I'm not convinced that the drop in Zinc was sustainable. Someone commented that China was effectively dumping Zinc this year to take advantage of a tax benefit that is likely to be removed next year. It was only a 5% rebate though.

Looking at the LME stock level charts they did have a sudden rise in stock at the beginning of November, however that has now plateued and is on the decline again, not suprislingly as Zinc is about half the price it was 1 year ago.

Zinc production rose 19% this year, however it is unlikely to do the same next year,especially with these prices and also if the tax incentive in china is removed. Meaning demand may have a chance to catch up.

I would agree that ZFX, unless the M&A rumours are more than just that, is unlikely to return to 18+ in the short term, however I am of the opinion that Zinc prices have at least bottomed out in the short term and we should see the price at least stabilise or increase slightly.

 

[roland]

Zinifex is on the rise just now, I think someone knows something that I don't know - doesn't sound very fair to me

 

[legs]

Zinifex is on the rise just now, I think someone knows something that I don't know - doesn't sound very fair to me

I'm happy as I have more than enough already to risk waiting. Is their something anyone here knows that they'd like to share???...LOLOLO

 

[Rafa]

Has anyone noticed a double bottom at 14???

Would be great if someone with technical knowhow can confirrm this...
From the little i know if this is indeed confirmed, that would make for a price target of approx $24.

Naturally, a fall below 14 would mean the double bottom doesnt exist...

 

[legs]

Heres a graph showing the past 5 days. Volume is really building up half way through today... hopefully if it's not another rumour it can hold at these levels.

 

[DionM]

All aboard the ZFX rollercoaster .... again

It's certainly proving that $14ish support level ...

 

[legs]

All aboard the ZFX rollercoaster .... again

It's certainly proving that $14ish support level ...

It has, but it's over a very long period as shown here..the graph is for twelve months and shows the good support level.

 

[profithunter]

Rumours have surfaced again that Xstrata are planning a bid for ZFX, short sellers are panicking to cover their positions.

 

[overule]

I did not see any news. Why do you say that ?
Please clarify.

Thank you

 

[Rafa]

From Dow Jones Newswire

[Dow Jones] Zinifex (ZFX.AU) up 1.2% at A$14.91, fades from A$15.43 peak as takeover rumor fails to gain traction. Xstrata (XTA.LN) looked at Zinifex's Century Mine at the end of Pasminco. But industry insider says he hasn't heard of any move on Zinifex. Says Xstrata will have an open file on Zinifex, but that they have enough zinc supply for their portfolio for some years. Says Xstrata's outlook for zinc not as bullish as for other commodities. "I don't think they would do a Jubilee on zinc," says person, who declined to be named. Failure of ZFX rally today suggests it could retest major support at A$13.92 (38.2% retracement of lifetime rally). But most analysts agree Zinifex should be well supported. "In a red-hot sector for M&A, it could be a use it or lose it as Zinifex is effectively a self funding takeover target with one-third of its market capitalization in cash," said Citigroup in a report last Friday. (DWR)

so its not xstrata... but maybe someone else might be interested!
no further news from oxr