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Since the Low in March, the zinc price has gained over 10%. Surely the Market has noticed?

 

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As to mine profitability, any price gain will improve the bottom line of a producer by a multiple of that %-age.

Consider a mine with All-in costs of $1900 per ton. In March, their profit margin would have been as low as 5%, now closer to 20%.

In cases of high production costs, e.g. $2000, it can even mean a turnaround from uneconomical to profitable.

 

But as Andy Home cautions, if the recent rally is only or mainly speculative, the calculation can just as quickly change; should that happen, zinc miners will again feel the pinch. Compare the charts of your favourite zinc producer to Zinc's weekly:

 

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  • 1 year later...
Zinc is everywhere. It helps protect steel from corrosion and our skin from the sun. It makes fireworks sparkle and is even used to treat an upset stomach.

 

Like many commodities, it's got a lot cheaper because there's more of it than we need. That may be about to change after Glencore Plc, the world's largest producer of the mined metal, said it's going to cut output by a third. Zinc prices jumped the most in more than four years Friday in response.

http://www.bloomberg.com/news/articles/201...screen-to-steel
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  • 5 months later...
...if you are looking for bullish forecasts, go no further that Christopher Ecclestone of London-based Hallgarten & Co. He has looked not so much at demand but at future mine production capacity and made some interesting calls. Zinc will be the big winner in Ecclestone's view, nearly doubling by 2019 to $US3306 tonne (against Friday's $US1846), copper will hit $US7053/tonne ($US4831 on Friday), and tin $US22,800/tonne ($US16,665). He sees Tungsten more than doubling in price and antimony rising from $US5100/tonne in January 2016 to $US10,450 by 2019.

 

The zinc forecast will be of interest to those responsible for the sudden (and on no news) 28.6 per cent rise price and huge leap in trading volume on Wednesday in zinc hopeful Marindi Metals (MZN). This was queried by the ASX but the company could not account for the sudden interest in its stock.

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  • 1 year later...
The lack of quality zinc stocks on the ASX has been a frustration for investors who have watched zinc prices double over the past 18 months to ten year highs.

 

But that should change at 10am Thursday when New Century Zinc lists on the ASX. The company is built around Queensland's Century Zinc mine, which was acquired from Chinese giant MMG in March.

 

More than $5 million was raised from investors for the zinc tailings project, which is also an infrastructure play given it has ownership of the 304 kilometre pipe that carries zinc concentrate to a port which the company also owns.

 

Several other zinc juniors plan to use that pipe to export their product, meaning New Century should do a nice business in clipping tickets, not to mention the multiple zinc prospects on the lease.

 

The New Century team includes former Syrah boss Tolga Kumova, who has already been involved in one of this year's very few successful initial public offerings, Alderan Resources.

there's this year's posterboy name again.

 

can't find it here, though http://www.asx.com.au/prices/upcoming.htm

 

ah, there it is ......... backing into Atilla Resources AYA

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Former owners MMG Ltd yesterday said it would transfer the mine to a company specialising in mine rehabilitation. The company, Century Mine Rehabilitation Project, in turn had sealed a deal with Attila to fund rehabilitation at the mine, which shut down in 2015. [it has] progressively acquire[d] the mine including a processing plant, mine site, slurry pipeline and airport.

 

Smaller companies such as Atilla often take over mines at the end of their life to extract remaining reserves, a process known as "wringing the rag." Attila would invest $10 million in restarting operations as well taking a stake in the company rehabilitating the mine.

 

Century, which was one of the largest zinc mines in the world, began production in 1999 producing both zinc and lead that was shipped to a port on the Gulf of Carpentaria.

 

Attila managing director Patrick Walta said there was still an estimated $2 billion worth of zinc left at the mine. "We expect to be operating until 2050," Mr Walta said.

 

The company said the reopening of the mine would initially involve reprocessing of tailings allowing much of the rehabilitation to be achieved through new cash flow. There also was potential for further exploration, including 783 square kilometres of mining licences and permits. The mine produced on average 475,000 tonne of zine per annum and 50,000 tonne of lead each year during its history.

Courier Mail, 3 months ago
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The bear case for the zinc price

Frik Els | about 7 hours ago

 

The price of zinc pulled back on Tuesday, easing to $2,797 a tonne ($1.27 per pound) after a reports that pointed to fewer supply constraints and lacklustre demand for the metal dampened sentiment. Zinc, mainly used to galvanize steel, is still trading 9% for the better year to date after a 60% rally in 2016 made it the best performing commodity of last year.

 

Reuters reports zinc bulls expected shortages to develop in China, responsible for more than 40% of world demand, where physical market premiums in Shanghai reached a four-year high of $195 a tonne in June before pulling back to $175:

 

"We think the second-half 2017 fundamental outlook for zinc looks less supportive, easing supply constraints and questionable demand strength," JP Morgan analyst Natasha Kaneva wrote in a note.

 

JP Morgan last week advised clients to take a short position in zinc, targeting a decline to $2,400.

Zinc, lead prices gain on widening deficits

 

The bearish prediction is in contrast to data from Lisbon-based International Lead and Zinc Study Group released yesterday that showed the global lead market recording a deeper deficit of 178,000 tonnes during January to end-May from 133,000 tonnes during the same period last year.

 

According to ILZSG mine output increased y 320,000 tonnes to 5.37 million tonnes from January to May, up 6.3% compared to 2016.

 

Apart from higher mine output, forward sales by producers such as Nyrstar which said earlier this month 70% of its output for the first half of 2018 has been hedged, is further clouding the outlook for zinc:

 

"There's always the danger that the market will be capped by producer selling and that hidden inventories will seep out, that's a perennial problem," said Bhar, who forecast that third-quarter LME prices would average $2,520 a tonne.

 

In addition to 368,569 tonnes of zinc stored in warehouses registered by the LME, the Shanghai Futures Exchange (ShFE) and the CME, analysts estimate there are up to 1.5 million tonnes of additional metal in other depots around the world.

 

http://www.mining.com/bear-case-zinc-price/

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