Zinc - The Metal for 2007

BREND · 9 March 2007

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

I'm optimistic on commodity, but not the whole group of resources, just those that have limited supply and rising demand.

Mainly optimistic on lead and nickel now:
http://basemetal-trading.blogspot.com/2007/03/industrial-metal-prices-advance-in.html

Yes, I'll still hold on to ZFX, commission is too high in Australia market for me to trade in and out. And also because ZFX supplies lead and silver as well, which I'm optimistic about too.

There are reports saying the exports of zinc from China is not sustainable, which I believe so, the supply will dry up in time to come, but I do not know when.

BREND · 9 March 2007

A federation of unions at Peru's largest zinc producer Volcan Compania
Minera on Friday will present a strike notice for March 19 in the absence of
an agreement with management over profit sharing and other issues, a union
leader said Thursday.
"We are going ahead with the strike notice," federation leader Fidel
Reginaldo told Platts.
"The company had failed to distribute all of the 8% of profits to workers
as required by law, Reginaldo said. He added that the company had not honored
an agreement reached last September to reinstate unionized workers in jobs
being performed by sub-contracted workers.
Unionized workers at the mine total 1,600. Sub-contracted workers, around
3,000, also plan to walk off their jobs, Reginaldo said.
Officials at Volcan were unavailable for comment.
Locally-owned Volcan operates the mines of Cerro de Pasco, Carahuacra,
San Cristobaland Andaychaugua in the central Andes.

Halba · 9 March 2007

zinc. copper, lead stockpiles all down

looks good, stronger for longer

Halba · 9 March 2007

I must admit you are well researched Brend. Do you use Basemetals.com?

rederob · 9 March 2007

BREND said:
There are reports saying the exports of zinc from China is not sustainable, which I believe so, the supply will dry up in time to come, but I do not know when.

There are about 4 months worth on present inflow/outflow data.
Destocking is a dangerous game.
China has again been caught out on copper this time, having got nickel very badly wrong in 2005.
Lead will get a slight boost from ZFX Port Pirie smelter outage, but depends how long it will last as to impact.
From an LME perspective, zinc remains in very precarious balance, with downside to inventory most likely on present global IP continuation.

BREND · 10 March 2007

Halba said:
I must admit you are well researched Brend. Do you use Basemetals.com?

Halba, I'm a metal dealer, reading on metal news is my job.
I read all kind of news that I can get, whether its from internet, bloomberg, reuters, clients, suppliers, London, anywhere!

BREND · 10 March 2007

rederob said:
There are about 4 months worth on present inflow/outflow data.
Destocking is a dangerous game.
China has again been caught out on copper this time, having got nickel very badly wrong in 2005.
Lead will get a slight boost from ZFX Port Pirie smelter outage, but depends how long it will last as to impact.
From an LME perspective, zinc remains in very precarious balance, with downside to inventory most likely on present global IP continuation.

That's right!

Rederob, I'm not familar in the Australia market, except the usually famous ones like BHP, Rio, ZFX. Do you know of any good nickel mining stocks to invest?

Halba · 10 March 2007

Nickel producers on ASX-

Jubilee, Minara, Salay Malay, Mincor

BREND · 11 March 2007

Halba said:
Nickel producers on ASX-

Jubilee, Minara, Salay Malay, Mincor

Thanks!

Gundini · 11 March 2007

Gundini said:
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?

So BREND, am I right in my thinking or way off track?

chops_a_must · 11 March 2007

BREND said:
Thanks!

MCR (mincor) is the more undervalued of the prospective/ speccie/ jnr prducer nicklers and minara (mre) the most undervalued of the actual producers. Don't hold either but they are definitely my favourites and the ones I would look to buy if I was going to get back into resources.

rederob · 11 March 2007

Gundini said:
So BREND, am I right in my thinking or way off track?

Way off track.
Most metal never goes onto LME inventory.
The Chinese can play an arbitrage game; but the margins are not that good at the moment.
I think there is more chance that the metal will never leave Chinese shores.
Cancelled warrants are back up to about 10% of inventory, so the technical weakness of zinc may swing back to strength in coming weeks.
It's certainly the best fundamental position that zinc has been in this year.

Halba · 11 March 2007

Thanks rederob. Notice fridays drawdown and increase of over 3500 tonnes in cancelled warrants. Solid signs.

BREND · 12 March 2007

chops_a_must said:
MCR (mincor) is the more undervalued of the prospective/ speccie/ jnr prducer nicklers and minara (mre) the most undervalued of the actual producers. Don't hold either but they are definitely my favourites and the ones I would look to buy if I was going to get back into resources.

Thanks, looks like a good stock to me, and fund managers have been buying in Feb and Mar 07.

eMark · 14 March 2007

London Metal Exchange Warehouse Stocks
( March 14 )
Metal Tonnes in Storage Change from
previous day
Aluminum 797925 -350
Copper 197750 -1975
Nickel 3816 -60
Lead 31250 +350
Zinc 95750 +1625

Zinc inventory rises for 3rd day straight. Great timing for ZFX

rwkni1 · 15 March 2007

rederob said:
Way off track.
Most metal never goes onto LME inventory.
The Chinese can play an arbitrage game; but the margins are not that good at the moment.
I think there is more chance that the metal will never leave Chinese shores.
Cancelled warrants are back up to about 10% of inventory, so the technical weakness of zinc may swing back to strength in coming weeks.
It's certainly the best fundamental position that zinc has been in this year.

I agree that most metal never goes onto LME inventory, but i would think that 50kt of idle inventory that is sitting idle in Shanghai will find its way to LME at some point. Cancelled warrants have come back a little bit, but still look pretty volatile. Fundamentally i'm still a bull, simply because i don't think the catch up in supply will be there in 2007. My only real concern is an unforseen supply increase out of China, which is really a bit of a black box in terms of knowing about new mines and expansions. Brend still has me a little worried with that talk of 50kt just waiting to be dumped onto LME.

Halba · 15 March 2007

Looks temporary emark, bear in mind there were about 6 days drawdown in a row to 90k. Seems to be fluctuating between 90k to 100k. Market is overdoing the bashing on zfx/pem one feels exacerbated by recent corrections.

Hold tight. If you believe in the china bull/ rba's comments say it will last decades. So day to day fluctuations will occur. Look at copper, stockpiles went from 100k to 200k but coming back down.

eMark · 15 March 2007

Halba said:
Looks temporary emark, bear in mind there were about 6 days drawdown in a row to 90k. Seems to be fluctuating between 90k to 100k. Market is overdoing the bashing on zfx/pem one feels exacerbated by recent corrections.

Hold tight. If you believe in the china bull/ rba's comments say it will last decades. So day to day fluctuations will occur. Look at copper, stockpiles went from 100k to 200k but coming back down.

I hope Halba...

London Metal Exchange Warehouse Stocks
( March 15 )
Metal Tonnes in Storage Change from
previous day
Aluminum 798000 +75
Copper 196125 -1625
Nickel 3594 -222
Lead 31075 -175
Zinc 96800 +1050

Although tonight so far Zinc appears to be supported by the decreasing copper inventory.

Zinc March 15,06:00
Bid/Ask 1.5110 - 1.5201
Change +0.0544 +3.74%
Low/High 1.4566 - 1.5223

UMike · 15 March 2007

Up 4.2% now

Hopefully CBH follows suit

Moneybags · 15 March 2007

UMike said:
Up 4.2% now

Hopefully CBH follows suit

I hope all Zincers follow suit.

MB

Zinc - The Metal for 2007

BREND

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Halba

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rederob

BREND

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Halba

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Gundini

chops_a_must

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rederob

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eMark

rwkni1

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