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Zinc the metal for 2006

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Don't worry about me old Nizar.....I got me a piece of the cake, and the cream is yet to come...I KNOW THIS MATE!....but I like to play all sides on a good play like this..... short, med, and long term trading on this one in different packages.......and my opinions have obviously got your knickers in a twist......why don't you elaborate on your own comments against mine, so we can see just how clever you are instead of bailing out with the short digs...honestly I don't mind learning a trick or two....but this last one was a sad attempt at tossing me off the heap.

My opinions have been 'not far off the mark' lately on all posts....down to the wire virtualy....call it luck or call it bull.....but they are an opinion and don't bother trying to understand my methods...CAUSE they're mine!

What's yours?....no one liners please!

PS ...trying to help a mate learn to trade less like a gambler...so if you are picking up stress signals from me, that's why...less time for fishing and more here in front of this stupid box!.....lol
 
i dont think anyone has already posted this article on any thread,

this was on mineweb





Zinc and lead stocks so low, metal consumption could be constrained
By: Dorothy Kosich
Posted: '01-NOV-06 09:00' GMT © Mineweb 1997-2006



RENO, NV (Mineweb.com) --Teck Cominco executives Tuesday forecast that world zinc stocks will contain only 11 days of supply by the end of this year, and may sink so low that it could “constrain metals consumption.”

In a conference call to discuss third-quarter financial results, the Vancouver-based miner also noted that lead LME stocks have declined to only two days of global consumption.

Mike Agg, Vice President Refining & Metal Sales for Teck Cominco, said the shortage of zinc concentrates is already limiting global metal production, as the globally tight concentrate market continues through 2006 and 2007. As a result, Agg said the deficit will cause the drawdown on zinc stocks to continue and could actually “constrain metals consumption. He noted that only 18 days of total global zinc stocks remained at the end of September. London Metals Exchange stocks have fallen 73% so far this year to only 3.8 days of global consumption, according to Agg. Meanwhile, zinc has hit a record high of $1.95 per pound.

Agg explained that zinc spot premium prices are rising in most markets, including that “strong demand is outstripping supply” and “a lack of availability [of zinc] in local markets.” Global zinc demand is up 5.5% in the Americas, 5.7% in Europe, and 4.9% in Asia, as of the end of August.

Meanwhile, although LME stocks of lead rose to 70,000 tonnes during the first half of this year, Agg said the stocks have now declined to the mid-40,000-tonne range. Currently, he estimated LME stocks only contain two days of global lead consumption. In the meantime, the lead price hit the historic high of 75-cents per pound on Tuesday.

Teck Cominco Manager of Market Research Andy Roebuck forecast a deficit in the copper concentrate market for the remainder of this year and in 2007. Since available stockpiles are still low, Roebuck suggested restocking of copper concentrates could continue well into next year. He estimated that 129,000 tonnes of copper remain in LME stocks, or 25 days of global consumption, noting that 90% of those stocks are being stored in warehouses in South Korea and Singapore.

Teck has experienced its own zinc woes as zinc sales at the Alaskan Red Dog mine were 80,000 tonnes lower during the third quarter due to adverse weather conditions, which delayed the start of the shipping season, and further delayed loading and shipment. Teck Cominco President and CEO Don Lindsay said that due to the tight concentrate market and the delays, the company wasn’t able to get enough zinc to market rapidly enough during the third quarter.

The company also experienced headaches at its Pogo gold project in Alaska as an excavator cut through a power cable, resulting in a fire which damaged a power substation. Power is expected to be fully restored by the end of the year.

Meanwhile, the company also will take a $9 million charge for “social contributions” to be made by its sahre of the Antamina mine in Peru. The Peruvian Government has been pressuring mining companies to finalize a “voluntary” windfall profits program to pay for local Peruvian social programs. However, Teck Executive Vice President and COO Peter Kukielski told analysts that he doesn’t believe there will be a “fixed royalty” at Antamina, due to a contractual agreement.

FINANCIAL RESULTS

CEO Lindsay told analysts that the company will focus on international growth projects, such as the possibility of building a copper smelter at its Highland Valley project, and doesn’t expect to attempt another large acquisition. The company dropped its bid for Inco, and will sell its Inco stock to CVRD.

The company reported $504 million in net profit or $2.34 per share for the third quarter of this year, compared with a net profit of $405 million or $2 per share for the same quarter a year ago. Year-to-date net earnings were $1.6 billion or $7.48 per share, almost double the net earnings of $835 million ($4.12 per share) during the first nine months of 2005. Despite its failed takeover bid for Inco, the company reported $3.7 billion in cash and cash equivalents at the end of September
 
Awesome!!!! Everyone in this forum thats into resource stocks should read that.

Many thanks,
 
The lowest end-of-week LME zinc inventory levels in the past 15 years is this week’s 102,975 tonnes. In the past 8 weeks the average weekly drawdown on zinc inventories has been about 7,500 tonnes. If that rate is maintained LME zinc inventories will be exhausted in 14 weeks.
In the current TC/RC negotiations analysts consider that there is potential for the treatment charge to double from USD128/t to near USD250/t (of concentrate), but the price participation basis could increase from USD1,400/t (Zn) to within the range USD2,500/t to USD3,400/t. it is early in the negotiations, there is a concentrate shortage, demand for metal is strong and
stockpiles are decreasing. These negotiations are likely to be extended, not short.
Holding on to PEM and KZL, took part profits CBH.

Its never been so good.
 
brerwallabi said:
The lowest end-of-week LME zinc inventory levels in the past 15 years is this week’s 102,975 tonnes. In the past 8 weeks the average weekly drawdown on zinc inventories has been about 7,500 tonnes. If that rate is maintained LME zinc inventories will be exhausted in 14 weeks.
In the current TC/RC negotiations analysts consider that there is potential for the treatment charge to double from USD128/t to near USD250/t (of concentrate), but the price participation basis could increase from USD1,400/t (Zn) to within the range USD2,500/t to USD3,400/t. it is early in the negotiations, there is a concentrate shortage, demand for metal is strong and
stockpiles are decreasing. These negotiations are likely to be extended, not short.
Holding on to PEM and KZL, took part profits CBH.

Its never been so good.
Click to expand...

Dude you have to keep an eye "on warrant", so you know if teh tide changes

http://www.basemetals.com/stocks.aspx

Btw do you know what was the lowest LME zinc inventories ever?

thx

MS
 
michael_selway said:
Dude you have to keep an eye "on warrant", so you know if the tide changes

http://www.basemetals.com/stocks.aspx

Btw do you know what was the lowest LME zinc inventories ever?

thx

MS
Click to expand...
MS
Brother wallaby has made important points and we should heed them.
We really need next week to look for "cancellations" as there is enough in cancelled warrants to sustain drawdowns to 85k tonnes at moment.
Next week will see zinc's 100k headline figure breached, and its psychological impact will be huge.
As for lowest ever zinc inventory, go back to scratch (1991) as there is nothing within recent times showing such tightness.
Just as copper went into orbit before falling from the sky in May, we are seeing zinc on a similar trajectory now.
 
rederob said:
MS
Brother wallaby has made important points and we should heed them.
We really need next week to look for "cancellations" as there is enough in cancelled warrants to sustain drawdowns to 85k tonnes at moment.
Next week will see zinc's 100k headline figure breached, and its psychological impact will be huge.
As for lowest ever zinc inventory, go back to scratch (1991) as there is nothing within recent times showing such tightness.
Just as copper went into orbit before falling from the sky in May, we are seeing zinc on a similar trajectory now.
Click to expand...

copper stocks reached ~115ktonnes when the price was us$4.07 (intraday) in May. At the beginning of the year they were sitting on about 80ktonnes. So from January to May, the stocks rose sharply as did the price. Copper, at least at the time was trading not on fundamentals but on speculation from traders and hedge funds.

with zinc, its a whole different ball game. Not sharp increases, but slow and steady, as the price rise coincides with the drop in stocks. But u know what they say, slow and steady wins the race. Remember daily consumption is 29-35ktonnes per day.

that said, i wouldnt be suprised if some hedge funds were accumulating zinc from a while ago and they will dump when it hits $2+. But this impact will be unnoticed looking at the longer term picture. What do u think about this rederob? a probable situation that hedge funds are accumulating now to dump later? surely it cant just be smelters doing all the buying? and that would also explain why we are having larger drawdown rates of zinc now compared to say, a few months ago.
 
nizar said:
copper stocks reached ~115ktonnes when the price was us$4.07 (intraday) in May. At the beginning of the year they were sitting on about 80ktonnes. So from January to May, the stocks rose sharply as did the price. Copper, at least at the time was trading not on fundamentals but on speculation from traders and hedge funds.

with zinc, its a whole different ball game. Not sharp increases, but slow and steady, as the price rise coincides with the drop in stocks. But u know what they say, slow and steady wins the race. Remember daily consumption is 29-35ktonnes per day.

that said, i wouldnt be suprised if some hedge funds were accumulating zinc from a while ago and they will dump when it hits $2+. But this impact will be unnoticed looking at the longer term picture. What do u think about this rederob? a probable situation that hedge funds are accumulating now to dump later? surely it cant just be smelters doing all the buying? and that would also explain why we are having larger drawdown rates of zinc now compared to say, a few months ago.
Click to expand...

From what I read far from pushing prices above their fundamental level, hedge funds have been "shorting" copper all through 2006, leaving themselves with a alarming overhang that will have to be covered at some point by buying the stuff.
Nizar are you suggesting speculative purchases of zinc by hedge funds has been happening, if it is the case the hyper growth of China is not going to stop and the demand for zinc is such that any "dumping" will soon be absorbed in the scramble for the stuff.
300 hundred million Chinese peasants are heading for towns the demand will not cease, scarcity value will raise the price of zinc to beyond US$2lb
 
brerwallabi said:
From what I read far from pushing prices above their fundamental level, hedge funds have been "shorting" copper all through 2006, leaving themselves with a alarming overhang that will have to be covered at some point by buying the stuff.
Nizar are you suggesting speculative purchases of zinc by hedge funds has been happening, if it is the case the hyper growth of China is not going to stop and the demand for zinc is such that any "dumping" will soon be absorbed in the scramble for the stuff.
300 hundred million Chinese peasants are heading for towns the demand will not cease, scarcity value will raise the price of zinc to beyond US$2lb
Click to expand...
Very true brother wallaby.
Although copper inventories are high by recent standards, they are incredibly low by historical standards.
The US housing slowdown has fed more metal into LME exchanges and European destinations are also getting some inflows. However, most LME copper is in Asian locations, and the reason is attributed to Chinese destocking, plus SRB releases from reserves.
Note that Shanghai copper exchanges have declined over the past month or so, suggesting it's still more profitable to export than deliver locally.
The analysts reckon copper is about to have its day of reckoning, and they see price upside.
Right now the jury is out.
 
brerwallabi said:
From what I read far from pushing prices above their fundamental level, hedge funds have been "shorting" copper all through 2006, leaving themselves with a alarming overhang that will have to be covered at some point by buying the stuff.
Nizar are you suggesting speculative purchases of zinc by hedge funds has been happening, if it is the case the hyper growth of China is not going to stop and the demand for zinc is such that any "dumping" will soon be absorbed in the scramble for the stuff.
300 hundred million Chinese peasants are heading for towns the demand will not cease, scarcity value will raise the price of zinc to beyond US$2lb
Click to expand...


hedge funds were long copper for a long time, then in May, just when the masses were entering, they went short, and it collapsed.

if hedge funds were "shorting" copper all through 2006, then tell me why did the price almost double in those 5 months?
 
nizar said:
hedge funds were long copper for a long time, then in May, just when the masses were entering, they went short, and it collapsed.

if hedge funds were "shorting" copper all through 2006, then tell me why did the price almost double in those 5 months?
Click to expand...

I was just reading the Daily Telegraph (UK) earlier, its not my statement by the view of one Ambrose Evans-Pritchard.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/10/02/ccview02.xml
 
We might be due a breather in zinc related stocks. The moderator is trying to block my posts to a good site but here is what www minesite com has to say about some current stocks in tis weekely roundup

Oz. Very much so. Zinc is red hot, nickel not much cooler, and then we have renewed interest in the energy sector with coal stocks making an impressive return, and uranium stocks warming up as we head towards the big political showdown in April when both the government and opposition are likely to fall into line with pro-uranium policies. Capping off a remarkable week we had tremendous success from a couple of new floats, and waiting in the wings are about 16 more mining floats ready to list.

Minews. That is very interesting as AIM floats are down to a trickle, or even less. We might have a look later at who’s in your new float queue, but first a few prices, please?

Oz. You can’t go past the zinc producers, thanks to continued speculation that the world is close to running out of the stuff. Zinifex (ZFX), Perilya (PEM), CBH (CBH) and Kagara (KZL) all reached new 12-month highs during the week. Zinifex traded up to A$15.89 during Friday trade before easing to close the week at $15.88, a gain of A$1.23, or 8.4 per cent. What makes the latest price more noteworthy is that at this time last time Zinifex was trading at A$5.07, meaning the stock has risen by A$10.81 or 213 per cent in 12-months.

Kagara closed at A$7.24 after reaching its 12-month peak of A$7.81 on Tuesday. The gain for week was a modest A3 cents, and perhaps a pointer to the top of the market being close. The high for CBH was A78 cents on Friday, before a slip at the close to A76 cents, a gain of A8.5 cents (12.6 per cent), and Perilya reached its new high of A$4.66 on Wednesday, and closed the week at A$4.62, up A57 cents (14.2 per cent).

Minews. Spectacular moves.

Oz. True, but a small anecdote to make the point that the top is close. Over lunch during the week a friend of ours told the story of a big Perilya investor who is sitting on more than A$50 million worth of shares, but is waiting until they get to A$5 before he buys himself a new boat, and we’re not talking about a small boat.

Minews. So, the boys are starting to celebrate, and think about cashing out?

Oz. It would be hard not to wouldn’t it. Now, back to the prices because zinc, and boys with boats, was not the only story of last week.
 
Zinc November 03,13:00
Bid/Ask 1.9482 - 1.9573
Change +0.0225 +1.17%
Low/High 1.9075 - 1.9574

_______________

looks like CBH, KZL, TZN, ZFX, PEM, FXR are all looking for another sprint today
 
zinc spot upto us$1.98/lb.
touched to us$1.9981/lb.

should be interesting once us$2/lb is smashed, and it will be, just a matter of time.
 
well Pacer it is finally there :)
Up 3% over night and has broken through the $2.00 barrier . Don't really know where it goes from here but the inventories are still dropping so I suppose it's up :)

A pity you can't trade the metal directly :(
Cheers martin
 
x2rider said:
well Pacer it is finally there :)
Up 3% over night and has broken through the $2.00 barrier . Don't really know where it goes from here but the inventories are still dropping so I suppose it's up :)

A pity you can't trade the metal directly :(
Cheers martin
Click to expand...

stocks give better exposure in my opinion.
 

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