Zinc - The Metal for 2007

[vishalt]

Yeah i'm favouring Zinc this year.. ZFX performance is just mindblowing, and considering its giving a massive 70 cent dividend! I'm building up my shares in ZFX, with light positions in BHP and other defensive stocks.

Any targets for ZFX in 07/08?

 

[BREND]

Yeah i'm favouring Zinc this year.. ZFX performance is just mindblowing, and considering its giving a massive 70 cent dividend! I'm building up my shares in ZFX, with light positions in BHP and other defensive stocks.

Any targets for ZFX in 07/08?

My target is AUD27 in 2008. When zinc supply in China drys up, zinc price will fly again. ZFX also supplies lead and silver, I expect them to rise further in 2007.

 

[Sanhedrin]

Brend do you have some details on the Chinese
zinc mines, what are their expected mine life how
many years, and what tonnage remains to be pulled out on the dirt?

 

[UMike]

Back near the 1.60 mark




Stocks are on the way down.

 

[UMike]

Hopefully Zinc miners SP will go up

 

[BREND]

Brend do you have some details on the Chinese
zinc mines, what are their expected mine life how
many years, and what tonnage remains to be pulled out on the dirt?

Bad news, zinc demand in China is very bad now.

There is 50,000mt of zinc parked in Shanghai warehouse. Possibly waiting for LME price to rise, then export to LME. Then we may see sharp rise in zinc inventory again, and price plunged.

The only remedy is: demand for zinc in China to pick up. Have not seen this yet.

 

[UMike]

8:14 US time Base metals dropped as can be seen by the Nickel chart below.

Zinc still held up to finish in positive territory.

 

[rwkni1]

Bad news, zinc demand in China is very bad now.

There is 50,000mt of zinc parked in Shanghai warehouse. Possibly waiting for LME price to rise, then export to LME. Then we may see sharp rise in zinc inventory again, and price plunged.

The only remedy is: demand for zinc in China to pick up. Have not seen this yet.

50,000mt of zinc is a lot. Do you mean 50kt?

 

[rwkni1]

50,000mt of zinc is a lot. Do you mean 50kt?

Aplogies, i see you meant 50,000 metric tonnes.
Well, if that's the case the zinc market could really be up the cack if LME starts trading at a premium to Shanghai zinc.

 

[Halba]

Is that the same thing as normal tonnes i.e. 50,000t?

 

[Kauri]

Is that the same thing as normal tonnes i.e. 50,000t?

I think mt may be metric tonnes?? as opposed to imperial tons??

 

[Halba]

Yep its different. So how much is it imperial?

 

[Kauri]

Yep its different. So how much is it imperial?

Much the same.
1 tonne = 2205 pounds...
1 ton = 2240 pounds...

 

[rwkni1]

Much the same.
1 tonne = 2205 pounds...
1 ton = 2240 pounds...

Whenever you see someone quote tonnes in terms of metals its always metric.

BREND, any chance of divulging your source for this China number? Because if there is 50kt of zinc sitting in Shanghai it would change my whole outlook on zinc.

 

[vishalt]

Big/speculative call there Brend.

 

[rwkni1]

Yeah, I don't know how much to believe, but if his source is accurate the zinc market is in a lot of trouble. There is still a premium on LME zinc over Shanghai, not as much as in December and January, but its still there. This should induce some of that material into the Singapore warehouse if there is 50kt just sitting idle in Shanghai. Be interesting to see what happens over the next week or two.

 

[Halba]

What I don't like is somebody has quoted a remarkable figure: 50,000t of zinc without quoting a source. Moderator if you are there could you send a PM to Brend.

The total available zinc stockpiles r only 90,000t. So to quote 50,000t WITHOUT a source leaves me sceptical.

 

[BREND]

What I don't like is somebody has quoted a remarkable figure: 50,000t of zinc without quoting a source. Moderator if you are there could you send a PM to Brend.

The total available zinc stockpiles r only 90,000t. So to quote 50,000t WITHOUT a source leaves me sceptical.

This information is from my UK counterparty. Yes, it is 50,000mt.
The only hope of recovery in zinc price is: rise in demand of zinc in China.
I still holding onto Zinifex, I also hope that zinc price will rise.

 

[Gundini]

This information is from my UK counterparty. Yes, it is 50,000mt.
The only hope of recovery in zinc price is: rise in demand of zinc in China.
I still holding onto Zinifex, I also hope that zinc price will rise.

So please correct me if I'm wrong, but does this mean the currnet LME level of 91,000mt is soon to increase to 141,000mt once the Chinese see a price per pound that is profitable for them?

The last time there was this quantity available in LME was Sept/Oct 2006, and Zinc price was around the $1.55 as is now.

So surely this addition to the inventory will put pressure on the price of Zinc, even though they were trading at the same price in Sept/Oct 2006.

And given the demand fall off you mentioned in China, why would you hold ZFX?

Wouldn't you sell ZFX, and buy back cheaper after the fall in Zinc prices?

 

[Halba]

posted by Brend in Feb

Re: ZINC - The Metal for 2007

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Yippie! I believe zinc is still an undervalued metal.

As I mentioned earlier, demand of zinc in China has picked up. And now some funds believe that base metal demand will rise after Chinese New Year, so they bought up metal futures before the Chinese holidays. This is why base metals across the board are up lately.

But I believe aluminum price has overrun its fundamental, provides a good opportunity to short this metal:
http://basemetal-trading.blogspot.c...um-at-2836.html

What has changed in 2 weeks Brend? If you believe in the decade long commodity cycle, day to day fluctuations shouldn't bother