Australian (ASX) Stock Market Forum

Zinc the metal for 2006

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Zinc stocks only down 350t today - one of the smallest drop off that I can remember (although I remember a week of medicore drop offs). Very likely a result of the recent price rise - so hopefully with the correction we'll see more demand.
 
Honestly think it is just profit taking, the institutions have made plenty, and are stuffing their Xmas stocking!
 
Zinc would be a lot higher by now if it were not for the poor performance of copper.The fundamentals for copper is looking very weak and really does not justify it's present price.This is the one bogey that could curse zinc should copper suddenly collapse.Some analysts are doubtful whether other base metals could go higher without the lead of copper.
 
specman said:
Zinc would be a lot higher by now if it were not for the poor performance of copper.The fundamentals for copper is looking very weak and really does not justify it's present price.This is the one bogey that could curse zinc should copper suddenly collapse.Some analysts are doubtful whether other base metals could go higher without the lead of copper.
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Specman,

Why does copper needs to go higher for zinc to follow ?
 
specman said:
Zinc would be a lot higher by now if it were not for the poor performance of copper.The fundamentals for copper is looking very weak and really does not justify it's present price.This is the one bogey that could curse zinc should copper suddenly collapse.Some analysts are doubtful whether other base metals could go higher without the lead of copper.
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Specman - Agree. Copper is dragging zinc down the same way that oil is dragging gold down.
Fab - copper is a "barometer of the economy" as some say, so if copper leads the way for other base metals to a certain extent.
 
MalteseBull said:
Good time to stock up on CBH, KZL and ZFX?

opinions
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Id rather be buying after the stocks have bottomed out and are on the way up again.
But then you make less profit they say??
Yeh - but less risk of losing money in the short-term as the stocks may keep on falling.
 
I would just be happy if somone could tell me why AIM has been going through the roof and CBH and ZFX are going down at a rate of knots. :banghead:
 
thecountof said:
I would just be happy if somone could tell me why AIM has been going through the roof and CBH and ZFX are going down at a rate of knots. :banghead:
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Dont try to find explanations.
Rather, protect yourself from the losses.
There doesnt have to be a reason and it doesnt have to make sense. The market can stay irrational longer than you can stay solvent.

AIM wasnt moving much while CBH doubled from 40c to 80c in the last 2 months upto 2 weeks ago.
 
Simple the fact that ZFX is a big Insto Stock and Instos seem to be existing the mkt (see also BHP RIO WPL all sold down over last few days on large vol)

CBH ran hard from 30c level May Correction to 85c!!!! so its time to move on


AIM hadn't run, so that + lack of other opportunities + traders + momentum and up she went!
 
nizar said:
Dont try to find explanations.
Rather, protect yourself from the losses.
There doesnt have to be a reason and it doesnt have to make sense. The market can stay irrational longer than you can stay solvent.
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So very good words of wisdom there folks, pay attention to them!
 
MalteseBull said:
Good time to stock up on CBH, KZL and ZFX?

opinions
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I would say so soon actually

zinc is still $2 a pound, do u believe it!

But yeah if u could pick the bottom that is a bonus

thx

MS
 
michael_selway said:
I would say so soon actually

zinc is still $2 a pound, do u believe it!

But yeah if u could pick the bottom that is a bonus

thx

MS
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You been on holiday MS?
 
stoxclimber said:
Zinc stocks only down 350t today - one of the smallest drop off that I can remember (although I remember a week of medicore drop offs). Very likely a result of the recent price rise - so hopefully with the correction we'll see more demand.
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Stox, I think it goes a little bit like this....when Zn is purchased on the LME the buyer doesn't take possession for 3 months. It just moves from the "on warrant" LME supplies to the "Cancelled", but the overall tonnage of the LME doesn't change. The actual tonnage of Zn that moves from the LME on a daily basis comes from the cancelled stockpile. So the decrease of 350t that you are referring to is actually a result of trading 3 months ago, not the current Zinc action.

At the same time, 2000t can leave the LME today without any Zinc getting sold all week (as it is just stock sold 3 months ago)... it's all about the "on warrant" Zinc Stockpiles. If there os 10k "ON warrant" and 80k cancelled. That is alot more positive than 80k on warrant, 10k cancelled. This hasn't been the clearest explanation, but I hope you get my meaning... Rederob, YT- am I close here?
 
rederob said:
MS
You are a worry!
The zinc was sold a long time ago.
What has happened is that warrants have been exercised - ie cancelled - and buyers have chosen to take delivery of the metal.
Accordingly, that metal will be moved out of the various warehouses in days/weeks to come, and land in the laps of typical consumers.
I am still waiting for MS to respond to his "fake buying" claim, made a few days ago: Willbe interested to understand where/how this happens.
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Well, here it is in Rederob's own words... when it comes to the metals market you wont find many more cluey on the ASX.
 
Kipp said:
Well, here it is in Rederob's own words... when it comes to the metals market you wont find many more cluey on the ASX.
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Kipp
You have grasped the idea, although actual time frames can be extremely variable.
Zinc's backwardation has spun out, meaning spot prices are now well above future prices.
Consumers are never keen to enter the spot market while backwardation is increasing as it incrementally ramps up the forward price of metal, and adds significantly to their production costs.
So we are a stage where consumers will try to hold out as long as they can, on the basis that the market will right itself.
Unfortunately, there is no sign on the horizon indicating their prayers will be answered, and they will end up getting back into spot as it continues to tighten. In turn, they will likely lead to the next major upleg as consumers come to realise it's a mad scramble for whatever is on the the table. Otherwise their production (and ability to satisfy forward orders/contracts) goes down the gurgler.
Ideally we would prefer (at least I would) a further decline in zinc over coming days, followed by rather slow consolidation foe another week or so. This may happen if consumers try to fool the market by not buying into it. We will truly know the market is fooled when there are minimal inflows matched by minimal outflows (you can see this trend presently occurring for nickel).
Should this scenario spin out, the likes of ZFX and KZL can add another 20% in a flash, and new highs will be spectacular (note that exactly a year ago OXR took off and more than doubled in price within 6 months).
 

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