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Zinc - The Metal for 2007

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Haha, so funny, we never use this kind of tactics.
 
michael_selway said:
hi yes, but will it be significantly up in the MT or LT in your view?

thx

MS
Click to expand...

My view on zinc is that it will continue to fall in the mid-term, so I'll still recommend my clients to short zinc on rebound.

I'm a futures player, so mid-term can be just 1-4 weeks' time.
Long-term is hard to say for now.
 
China to become net zinc exporter this year

China is set to become a net exporter of refined zinc this year, due to oversupply pressure and a slowdown in domestic demand, said a Chinese zinc expert at the China International Nonferrous Metals Market Conference 2007, held in Hong Kong yesterday.

Despite the Chinese government's decision to introduce a 5 percent export tax on 1# zinc on November 1, 2006 and increase the export tax on refined zin from a current 5 percent to 10 percent, effective June 1, the country will remain a net zinc exporter for the rest of the year, according to Feng Juncong, a zinc expert with Beijing Antaike Information Co. Ltd., a mining and metals information provider affiliated with China Nonferrous Metals Industry Association.

China returned to net zinc importer status in April this year, after maintaining net exporter status for nearly six months since October last year.

"There will be no change in the 5 percent value-added tax (VAT) rebate on 0# refined zinc, which makes up over 65 percent of China's zinc exports. As a result, we will not see a significant reduction in zinc exports this year," Feng said.

China's zinc oversupply will reach nearly 200,000 tons this year, she forecasted.

Based on first quarter production levels, the average monthly production this year will be up 30,000 to 40,000 tons from 2006. Domestic consumption is also set to increase 270,000 to 280,000 tons this year, from 3.39 million tons in 2006, she said

"China produced 3.15 million tons of refined zinc in 2006, at an average rate of 260,000 tons per month. However, zinc smelting capacity reached 4.3 million tons last year. In the past seven years, China's zinc smelting capacity has grown on average 12.8 percent each year. We predict growth to continue to climb until 2010, when China's total zinc smelting capacity will reach 5.8 million tons, up 45.7 percent from 2005," she said.

China's rapid capacity expansion has been mainly driven by rising zinc prices, technological upgrades and government policies that encourage new projects above 100,000 tons in annual capacity, she explained.

China's zinc consumption slackened in August last year, due to pressure from increasing zinc prices. Actual consumption growth decreased from 15 percent in 2005, to 9.8 percent last year.

According to her predictions, China's zinc consumption will remain at 7.6 percent between 2007 and 2010, during which domestic zinc consumption will exceed 4.7 million tons.

She further predicted domestic zinc spot prices would fall to 26,000 yuan (US$3,399.14) per ton in the second half of this year, due to a slowdown in domestic consumption and an eased zinc concentrate supply. The benchmark spot price for 0# refined zinc was 30,100 yuan (US$3,935.15) per ton yesterday on the Shanghai Yangtze River Nonferrous Metals Market.

China's zinc concentrate production amounted to 2.84 million tons in 2006, up 10.9 percent from 2005 while the annual average growth rate was 7.2 percent from 2000 to 2005.

There is a saying, buy whatever China is buying. Since China becoming a net exporter of zinc, I'll not be a buyer of zinc, at least for now.
 
BREND said:
My view on zinc is that it will continue to fall in the mid-term, so I'll still recommend my clients to short zinc on rebound.

I'm a futures player, so mid-term can be just 1-4 weeks' time.
Long-term is hard to say for now.
Click to expand...

Brend, I won't have read all of your postings so forgive me if you have mentioned this somewhere else before. Just wondering whether your predictions / recommemdations are based on which of the following areas :
1) technical analysis / charts
2) fundamentals
3) insider
4) six sense + casino + guts
5) Or a combination of the above.
Most people on this forum like to pin themseleves to either (1) or( 2). I think I am more (2) and (4). And the real insiders don't post.
Cheers.
 
i think this is the place to talk about zinc
i m a newbee but i like to share the experience form the liftoff ZNC
not ramping... not holding but informing
cheers
 

I would say combination of the above, but like more traders / investors I place more emphasise on 1 & 2. Sometimes I pray to Jesus before initiating a position, if I don't peace, I may not initiate that trade.
 
BREND said:
I'm right again, zinc is down another $40/mt today.
Click to expand...

Hate to burst yr balloon Brend, but Zinc ain't down tonite...if fact rallying hard.

So how are yr clients feeling now if they followed yr advice on Tuesday, a little squeezed no doubt...hmmm???

Zinc up $97.50/Mt as I type US$3690.00, funds have turned around and gone long after being short for Monday, Tuesday and Wednesday morning.

Cheers
 

Hello Damuzzdu, you are outdated, those short positions are already out.

If you look into Copper thread, I had advised my clients to short zinc at $3700today.
 
BREND said:
Hello Damuzzdu, you are outdated, those short positions are already out.

If you look into Copper thread, I had advised my clients to short zinc at $3700today.
Click to expand...

My client shorted zinc at $3700, bought back at $3640, ok? Must report?
 
BREND said:
My client shorted zinc at $3700, bought back at $3640, ok? Must report?
Click to expand...

Well done, it is always good to report a profitable trade, however i'm quite confused...

When did ur client(s) short Zinc at $3700, as the the last time Zinc cash was at $3700 apart from from during today's trading was on 23rd May, and yet according to yr posts you advised ur clients to short zinc per the following post on 29th May...

BREND said:
I've asked my clients to short zinc futures today.
Click to expand...

Now, according to my data from LME on 29/5 zinc official cash high was $3605??

Is this a futures contract or something???

Cheers
 

When you trade metals at LME, its always a 3 month futures contract, not cash contract.
 
BREND said:
My client shorted zinc at $3700, bought back at $3640, ok? Must report?
Click to expand...

thats very little "profit" for quite a bit of risk

also how much is brokerage or any other taxes for your clients who execute this trade?

thx

MS
 
michael_selway said:
thats very little "profit" for quite a bit of risk

also how much is brokerage or any other taxes for your clients who execute this trade?

thx

MS
Click to expand...

The net profit is about a month's wage for a Singapore worker, for only 2 hour's effort.
 
BREND said:
The net profit is about a month's wage for a Singapore worker, for only 2 hour's effort.
Click to expand...

but how much initial outlay, and have you had any losses incurred with these sort of trades?

thx

MS
 
michael_selway said:
but how much initial outlay, and have you had any losses incurred with these sort of trades?

thx

MS
Click to expand...

The minimum capital required is the margin of the metal.
In the case of zinc, margin required is USD10,000plus, my client profit for 1 lot is USD1500, so percentage gain is 15% in 1 day.

I do not win all the time, if you look into my blog: http://basemetal-trading.blogspot.com/, sometimes I win, sometimes I lose, but so far winning trades is more than losing trades. Who can win all the times?

I guess u are an equity investor, I invest in equities too (Singapore, Australia and US market). The perceptive of an equity investor and a futures dealer is not the same, very different actually.

I had participated in an America nationwide stock-pick competition organised by Zacks.com. Currently my ranking is 149th out of 25,000 participants, this makes my top 0.6% of the competition. My portfolio profit since start of 2007 is 26% now. More information here: http://basemetal-trading.blogspot.com/2007/05/goldmans-global-alpha-hedge-fund-falls.html

 

Brend,

Following yr blogspot. very interesting, and very nicely presented.

I'm guessing the charts are from the Bloomberg Trading platform??

A couple of other questions:

Entry for May 17th....

Unrealised profit is: (7685 - 7120) x 25 = USD14,125 What is the 25 (Like a lot in Tonnes???)

Margin required is USD17,425: how do you pay for this do you lodge cash, shares or ??? It seems high to me, but may not to you. However once you lodge it how do you get it back???

Notice you now long Copper based on Shanghai stocks, do you think Copper might pull zinc with up it or ?

Cheers
Muzz
 

Thanks. Yes charts from Bloomberg.

There are 25 tons in 1 lot of copper, aluminum, lead and zinc futures contract. For nickel is 6 tons, tin is 5.

Shanghai stocks is always an important factor to look for anyone analysing copper. Because this give an idea if China is oversupplied with copper.

Previously I'm bearish on copper, seeing the big fall in Shanghai inventory last Friday I've turned bullish again.

Yes, rise in copper will bring zinc price up. Between copper and zinc equities, I prefer copper, ie Southern Copper and Freeport (both listed in NYSE). China has a lot of zinc supply, once LME zinc price is high, China merchants may start to deliver zinc warrants into LME warehouse again, this will push zinc price down.
 
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