Jump to content

Zinc


filament

Recommended Posts

In reply to: jahar on Saturday 28/06/08 09:51am

It would appear that Zinc has found support at .80lb and looks to be moving towards a possible uptrend/trend break. Certainly Chinas decision to drop thier Export Tax Break helped.

 

Zinc Advances in London After China Scraps Tax Break on Exports

 

By Chanyaporn Chanjaroen

 

July 31 (Bloomberg) -- Zinc rose on expectations a decision by China, the largest producer and user of the metal, to remove a tax break on exports will curb supply to global markets.

 

China will withdraw a 5 percent tax rebate for exporters of the best-quality zinc and silver from Aug. 1, the country's State Administration of Taxation said today. Zinc has lost half its value in the past year, declining to a 2 1/2-year low of $1,750 a metric ton on July 4.

 

``This announcement caused a quick jump in zinc prices,'' John Reade, an analyst at UBS AG in London, wrote today in an e- mailed note. ``This could be a trigger for a sharp move higher to $2,000 a ton or beyond.''

 

Zinc for delivery in three months advanced $30, or 1.6 percent, to $1,900 a ton as of 4:58 p.m. on the London Metal Exchange.

 

China's tax change is aimed at trimming a record trade surplus, and reducing pollution and energy use. Zinc output in the country rose 7 percent in the first half to 1.92 million tons, according to the National Bureau of Statistics.

 

LME stockpiles of the metal gained 1.9 percent to 157,325 tons today, the highest since Sept. 14, 2006. Zinc's canceled warrants, or stockpiles earmarked for withdrawal from LME- registered warehouses, soared a combined 70 percent yesterday and today to 13,475 tons, the highest since April 10, 2007.

 

Copper inventories grew 4,450 tons, or 3.2 percent, to 142,400 tons, the highest since Feb. 29, according to the exchange's daily data.

 

Copper Prices

 

The benchmark copper contract added $35, or 0.4 percent, to $8,065 a ton. It has advanced 21 percent this year and traded at a record $8,940 a ton on July 2.

 

The gains bolstered profit at Anglo American Plc, the world's fourth-biggest diversified mining business. The London- based company's first-half net rose 27 percent. Anglo has $15 billion of projects under way and is considering more as it seeks to increase growth in metals including copper.

 

``We expect commodity market fundamentals to remain strong,'' Chief Executive Officer Cynthia Carroll said today at a presentation in London. Chinese demand ``will create the potential for a sustained commodity up-cycle,'' she said.

 

Lead's canceled warrants jumped 61 percent to 8,325 tons, or 9 percent of total exchange inventories. Almost half of the stocks were scheduled to leave from Long Beach, California.

 

A lead recycling plant managed by Quemetco Inc. in California was shut after a July 3 fire. It has an annual capacity of 120,000 tons, according to Fortis.

 

Lead gained $28, or 1.3 percent, to $2,208 a ton.

 

Among other LME-traded metals, aluminum rose $17, or 0.6 percent, to $2,977 a ton and nickel dropped $300, or 1.6 percent, to $18,450. Tin lost $250 to $22,250 a ton.

 

-- With reporting by Xiao Yu in Beijing, Carli Lourens in Johannesburg, and Li Xiaowei in Shanghai. Editors: Stuart Wallace, M. Shankar

 

To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net

 

Last Updated: July 31, 2008 12:15 EDT

 

 

Link to comment
Share on other sites

  • 5 months later...
  • Replies 63
  • Created
  • Last Reply

Top Posters In This Topic

In reply to: ComUnNoTerms on Friday 01/08/08 11:32am

Not much support for zinc overnight with a 4c drop from 59c to 55c/lb and the threat of a shutdown to Europe largest zinc mine, the world's fifth largest zinc mine!

BASE METALS

CARE AND MAINTENANCE http://www.sharescene.com/html/emoticons/icon13.gif

Tara, Europe's largest zinc mine, may be closed - again

Irish trade union SIPTU says owner Boliden plans to put the Tara mine on care and maintenance if it doesn't agree to new working conditions at the mine, one of the world's largest zinc producers.

 

Author: Lawrence Williams

Posted: Wednesday , 07 Jan 2009

 

LONDON -

 

According to reports from Ireland, the country's largest mine of any kind, and Europe's largest zinc mining operation (the fifth largest in the world), Tara, may be put on care and maintenance by owner Boliden if the workforce won't agree to new work proposals.

 

Reuters quotes Ireland's Services, Industrial, Professional & Technical Union (SIPTU) as saying that "The company is proposing to substantially reduce productivity related earnings and revise shift patterns ... If the company goes ahead with its proposal to put the mine on a care and maintenance basis from January 19 this will have a terrible impact on the economy of County Meath"

 

Tara has been the big success story for the revival of a mining industry in Ireland. It commenced production back in 1977 and has been Europe's largest zinc and lead miner for some years. The operation mines some 2.7 million tonnes of ore annually, which yields zinc and lead concentrates containing up to 200,000 tonnes of zinc and 40,000 tonnes of lead metal. The concentrates are shipped to Boliden's metallurgical plants at Odda in Norway and Kokkola in Finland - but these are both reducing output because of the decline in zinc and lead demand and prices.

 

This is not the first time Tara has faced a shutdown for economic reasons. Previous owner Outokumpu shut the mine down back in 2001 for two years because of high mining costs. Ownership was subsequently transferred to Boliden in 2004 as part of an asset swap and restructuring of the two Nordic companies.

 

Boliden and the SIPTU union have been in talks on the implementation of new working conditions since the middle of last month. Boliden said before Christmas that it hadn't made a decision on mine closure, but it was under consideration and with the January 19th deadline looming an announcement is expected soon.

 

 

 

 

 

 

 

 

 

 

 

 

Link to comment
Share on other sites

  • 3 months later...

http://in.reuters.com/article/privateEquit...143559020090501

 

-- Andy Home is a Reuters columnist. The opinions expressed are his own. For more Metals Insider columns, top Reuters metals stories and third party content, please visit the free Base Metals Community website at (www.metalsinsider.com)

 

-- * LME zinc stocks now falling * Unprecedented surge of metal into China * Concentrates market tightening * Can mine supply respond ?

 

 

By Andy Home LONDON, May 1 (Reuters) - The LME three-month zinc price has risen 18 percent so far this year, making zinc the third best performer among LME base metals (after copper and lead). Which is somewhat surprising, since the International Lead and Zinc Study Group (ILZSG) has just forecast the global market will record a production-consumption surplus of just over 260,000 tonnes in 2009.

 

[iD:nLN957124] It will, moreover, be the third consecutive year of surplus, following on a near-300,000-tonne surplus in 2007-2008, according to ILZSG calculations.

 

 

Why then the market's relatively exuberant year-to-date

performance ? Is it pricing in a much smaller surplus or even no surplus at all ? The answer could well be a bit of both.

 

 

VANISHING VISIBILITY LME stocks, as the most visible expression of market balance, hold the key to what is currently going on in the zinc market. LME inventory rose by 165,000 tonnes last year and surged another 104,250 tonnes in the first two months of 2009, peaking at 362,275 tonnes on Feb. 25.

 

Since then, however, the flow of metal has reversed and

exchange-registered inventory has fallen by 33,325 tonnes to 328,950 tonnes. That represents a very modest 11 days' of anticipated 2009 consumption.

 

 

Compare and contrast with the last peak in LME stocks in

April 2004. Back then they reached 787,150 tonnes, equivalent to 27 days' worth of global consumption. A strong supply-side response to the collapse in demand has

played a big role in mitigating the sort of build seen five

years ago. As Nyrstar, the world's largest producer of zinc metal, hailed in its just-released 2008 report, "the zinc industry responded more widely, quickly and decisively than in previous downturns to the sharp drop in zinc demand".

 

Nyrstar itself reported a massive 30-percent decline in first quarter 2009 production relative to the preceding quarter (Q4 08).

 

[iD:nLT544145] However, that is only part of the explanation for the change of trend in LME zinc stocks. The other part comes in the form of the surge in zinc metal

imports into China. The country's trade in zinc has been

extremely volatile in recent years but the current movement of metal is unprecedented, as can be seen in the following graphic.

 

(here) Part of China's import tonnage has been drawn down from the LME system. It's noticeable that the two key LME zinc locations in Asia, Singapore and Johor, are both showing year-to-date declines of over 10,000 tonnes. The two locations also account for 17,800 tonnes of the total 20,200 tonnes of metal sitting in the cancelled warrant category.

 

As with other metals, most particularly copper, zinc is benefiting from Beijing's industry support programme. The State Reserve Bureau has bought up 159,000 tonnes and several regional governments have announced their own mechanisms for helping struggling zinc producers.

 

 

[iD:nPEK324588] As such, the movement of metal amounts to little more than visible LME surplus being shifted to invisible non-LME surplus. However, as also with copper, the drain on LME stocks is impossible to ignore for LME traders, which is why neither the red metal nor zinc particularly feels like it is in supply-demand surplus.

 

 

VANISHING SURPLUS However, it is not just zinc metal that is responding to the open arbitrage between Shanghai and London. Zinc concentrate imports are also rising, up 16 percent in the first quarter of this year. Unlike zinc metal, this may be material the Western market can ill afford to lose. In its spring 2009 forecasts the ILZSG noted that global mine production is expected to fall at a faster pace (6 percent) than refined metal production (4 percent).

 

This reflects the wholesale closure of marginal mines and

deferral of new projects in response to a zinc price collapse that preceded the global financial turmoil of late last year. It will also leave the zinc concentrates market in small (100,000-tonne) deficit, according to ILZSG. Spot treatment charges (TCs) for smelting concentrate are already falling in response to this building tension in the raw materials market and Nyrstar felt it worth stressing in its Q1 2008 management report that the decline in terms is due only to the current arbitrage and "does not reflect a physical shortage

in the markets for zinc and lead concentrates."

 

From the other side of the smelter-miner divide, however,

comes a slightly different view. In its Q1 report Canada's Inmet Mining said that "we expect zinc mine production in 2009 to be below smelting requirements, and believe that a balanced or deficit zinc concentrate market could evolve."

 

Zinc's problem going forwards is that mine supply may have

lost some of the elasticity to higher prices that was seen in 2006-2007, when multiple restarts filled the news headlines. Many of the junior operators that tried to cash in on the bull market rally to over $4,000 were devastated by the timing and severity of the subsequent crash, particularly since it coincided with a severe constriction in credit availability.

 

The likes of Canada's SRA, Blue Note Metals and Acadian

Mining were not only forced to drastically scale back or even mothball recently-started operations but were sent reeling into bankruptcy protection.

 

At the same time several important established mines are

fast approaching the end of their lives. Sweden's Lundin, for example, will bring forward to this year from 2011 the permanent closure of its Galmoy mine in Ireland. Its Storliden mine in Sweden closed permanently at the end of last year.

 

 

Xstrata's big (250,000-tonne) Brunswick mine in Canada is

also fast approaching the end of the road, currently pencilled in for late next year. Right now none of this seems very relevant while demand is still so bombed out. But the zinc price is begging to differ.

 

That forecast 2009 metal surplus may look large but it is

fast disappearing into China, even while the raw materials

market looks in danger of swinging from surplus into deficit before the year is out.

Link to comment
Share on other sites

  • 6 months later...

 

Century mine zinc port running out of stocks

Mon Nov 16, 2009 11:40pm EST

 

(Corrects spelling of Karumba in second paragraph)

 

SYDNEY, Nov 17 (Reuters) - Australia's Century zinc mine will run out of zinc concentrate at its shipping port later on Tuesday, forcing buyers to look for alternative supply sources, a spokeswoman for the mine said.

 

Shipments of concentrate from the mine, owned by China's Minmetals, to the port of Karumba in eastern Australia were halted in October due to a break in the pipeline used to transport the material.

 

 

http://www.reuters.com/article/rbssIndustr...NAS773220091117

Link to comment
Share on other sites

  • 8 months later...

 

Got this in an email this morning.

 

Last night, 44,950 tonnes of zinc due for delivery to LME warehouses was cancelled. ThatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s nearly 12% of the total LME stockpile. Additionally, another 10% in hard stock is suddenly being drawn down by buyers. All this revolves around the LME warehouse in New Orleans.

 

So, Zn that hasnÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t performed as well as other base metals because there was supposed to be a larger than normal surplus building, is suddenly left with a stockpile 21% smaller than expected & suggestions of new demand.

 

 

Now I smell a rat. Consider the following possibilities.

 

1. Somebody was selling what didnÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t exist & has been caught short.

 

2. New Orleans is an overflow facility when stockpiles grow & generally trades at a discount, so it is possible the contango resulting from this makes a killing possible for delivery into a non LME Asian warehouse which trades higher.

 

3. The shortage results from some production failure, however the only one known is Horsehead Holdings refinery in Pennsylvania, which produces ZnO rather than the ZN metal cancelled. (Horsehead? Have to belong to the mafia, surely!)

 

4. There is real demand & a genuine shortage.

 

5. The whole lot is just blatant manipulation by the biggest player ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¦ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¦ JPM or GS?

 

 

 

Link to comment
Share on other sites

  • 11 months later...

There's an oversupply now, but a looming shortage is expected to change the game.

 

ZINC has long been runt in the litter of base metals, notwithstanding its multitude of uses. But the tide may be turning, with some big-name mine closures in the years ahead getting analysts thinking about the day when the oversupplied market goes into deficit.

Goldman Sachs made the point in a recent research note, which posed the question of whether unloved zinc could be the ''next copper,'' given the prospect of a possible shortage from 2013.

Now if zinc was going to take off like copper has done it would be a cause for some real celebration among the base metals producers. But we are looking at a slow burn when it comes to zinc lighting up. However, the potential for a decent price performance is there all right.

''Since 2007, zinc's cumulative surplus has been in the order of 1.3 million tonnes, and we expect the market to remain oversupplied both this year and next,'' Goldman said.

It then pointed out that a series of large mine closures (including Century in Queensland) on reserve bases being exhausted, a shortage of new projects, and expectations that China's internal mine production is levelling out suggest ''significant annual deficits in the zinc market from 2013''.

Goldman said all that would lead to ''growing pricing tension'' justifying significantly higher prices. ''Building some exposure to zinc over the next 12 months should be rewarding on a two-to-three-year view,'' it said.

Having said that, the broker was not moved enough to upgrade its zinc price forecasts. From the US98ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ a pound average for 2010 and the current $US1.06 a pound, Goldman expects a boring old $US1.03 a pound in 2011, US99ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ a pound in 2012 and $US1.07 a pound in 2013.

Then comes the expectation of some fun, with prices tipped to get to $US1.18 a pound in 2014 and $US1.25 a pound.

Given the delay in zinc prices taking off, investors are probably best advised to match zinc exposure to copper where they can. Kagara Ltd does just that from its north Queensland operations, with (Queensland) gold and (Western Australian) nickel and base metal exposure thrown in for good measure.

While zinc's improving price outlook is doing no harm for Kagara, the big hope is that its new managing director, former Newcrest man Geoff Day, can enforce a lasting reduction in production costs.

The recently released June quarter production report showed Day has been kicking some early goals, with Kagara's cash operating costs reduced by 3.2 per cent to $US1.70 a pound for copper and 16 per cent to US74ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ a pound for zinc (net of credits).

Day's target is for more reductions, with $US1.60 a pound for copper and US60ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ a pound for zinc the target.

More on his plans for the group are to be unveiled at a strategy briefing to brokers and fund managers at Chillagoe in north Queensland in September.

Meanwhile, the cost reduction trend and expectation that Day is not inviting the investment community to little old Chillagoe for just a cold beer, has prompted analysts who follow the stock to reaffirm aggressive share price targets on the stock, which closed at 62ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ on Friday.

Wilson HTM was one of those. It did trim the target a shade in its latest note on the company, but at $1.31 a share the target still a suggested 111 per cent premium to the market price. ''We retain our buy recommendation and expect further performance improvements and additional resource announcements in the company months,'' the broker said.

www.smh.com.au/business/zinc-or-swim-when-the-tide-turns-20110717-1hk1j.html#ixzz1SRjOZMyq

 

 

Link to comment
Share on other sites

  • 1 year later...
  • 1 year later...
  • 6 months later...

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...