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Interesting read - NyrstarÃÆâ€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 profit warning highlights zincÃÆâ€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 disconnects

September 26 2018 12:57 AM

By Andy Home London

extract

Belgian zinc producer Nyrstar issued a profits warning last week, citing ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“adverse market conditionsÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ. The company, which last year produced over 1mn tonnes of refined zinc, is feeling the pain from the dramatic price collapse of the last six months.

 

London Metal Exchange (LME) zinc hit an 11-year high of $3,595.50 per tonne in February. It is currently trading at $2,525 after touching a two-year low of $2,283 in August.

Retreat turned into rout as zinc got caught up in the broader LME sell-off, speculative players using the base metals complex to vent their trade war angst.

 

The resulting price implosion has opened up a disconnect with zincÃÆâ€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 internal supply-demand dynamics.

 

Right now the zinc price is suggesting that a wave of new mine supply is crashing along the supply chain. It isnÃÆâ€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.

 

The supply response to two years of rising zinc prices is only just starting.

 

Treatment charges, which is what companies such as Nyrstar receive for processing mined concentrate into refined metal, are still ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“historically lowÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ, compounding the financial hit from the low zinc price.

 

Nyrstar, like other smelters, is being squeezed between a price 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 signalling feast and a raw materials chain that is only just emerging from famine.

 

The benchmark zinc treatment charge this year was set at $147 per tonne, the lowest headline level in a decade.

 

Spot treatment charges in China have fallen much lower as smelters compete to source material in a tight mined concentrates market.

 

That was expected to change this year as new and reconditioned mines responded to higher prices.

They are coming, but itÃÆâ€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 taking time.

 

read more - https://www.gulf-times.com/story/607382/Nyr...-zinc-s-disconn

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Industry Trend Analysis - Global Zinc Mining Outlook

http://www.mining.com/wp-content/uploads/2...ctober-2018.pdf

extract

Australia

Australia's zinc sector will gradually recover from the H215 closure of Minerals and Metals Group's (MMG) Century zinc mine over the coming decade, as

rising prices prompt miners to restart major operations. We have revised up our zinc production growth forecast for 2018 and 2019, to 12% and 8%

respectively, based on plans for New Century Resources to restart production at the Century mine in Q318. Additionally, Glencore announced plans to

restart the idled Lady Loretta zinc mine in H118, with 2018 output expected to total 100kt and MMG's USD1.bn Dugald River, began production in November

2017 and will add an estimated 170kt of zinc annually at full capacity. Junior miners will continue to advance zinc projects in Australia, given the positive

outlook for zinc prices over the coming years. For instance, in February, Heron Resources awarded the contract for underground mining at the

Woodlawn copper-zinc project to Pybar Mining Services and expects annual production of 40kt zinc between late-2018 to early-2019.

 

Fitch Solutions Macro Research has just published its outlook for global zinc production. Globally, mined zinc production continues to ramp up over the coming years as elevated prices encourage miners to restart idled capacity and key new mines come online, according to the report.

 

Fitch forecasts global mined zinc production to increase by 3.5% in 2018, to 13.7mnt, and rise to 16.8mnt by 2027.

 

The report focusses on industry trend analyses in Australia, Canada, Peru, China, The U.S., Kazakhstan, Mexico, Namibia, India and Iran.

 

The global zinc mining outlook also identifies the ten largest zinc mines by volume:

 

1- India clinches the title for largest zinc mine with Rampura Agucha.

 

2- Red Dog in the U.S.

 

3- Antamina in Peru.

 

4- Mount Isa, Australia.

 

5- Penasquito, Mexico.

 

6- San Cristobal, Bolivia.

 

7- McAurthur River, Australia.

 

8- Cerro Lindo, Peru.

 

9- Tara, Ireland.

 

10- Skorpion, Namibia.

 

The report predicts that China's zinc production will stagnate due to declining ore grades and increasingly stringent environmental regulations, China will remain a key player in global zinc mine production.

http://www.mining.com/top-ten-zinc-producing-mines-world/

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Zinc market enters period of peak tightness: Andy Home

* LME Zinc price, spreads and stocks

 

LONDON ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ The London zinc market is experiencing unprecedented tightness this week.

 

As of MondayÃÆâ€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 close, the London Metal ExchangeÃÆâ€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 (LME) benchmark cash-to-three-months spread CMZN0-3 was valued at a backwardation of $97 per tonne.

 

The cash premium is now higher than the last spike in October 2017 with the only historical comparison the years 2006-2007, when LME stocks were also super low and the outright price hit an all-time high of $4,580 per tonne.

 

Fast forward a decade and the LME three-month price is currently treading water around $2,600, a long way off its February high of $3,600 per tonne.

 

This dissonance between spreads and price is a manifestation of the greater financialisation of the zinc market over the intervening decade with fund money a more powerful price driver.

 

And funds have been playing zinc from the short side since February, catching the unwary in a biting bear trap.

read more - http://www.mining.com/web/zinc-market-ente...ness-andy-home/

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$300 million zinc refinery expansion to increase production and jobs in north Queensland

ABC North Qld By Sofie Wainwright

 

Zinc production is set to increase in Australia with a multi-million-dollar investment to expand a north Queensland refinery.

 

Korea Zinc Company will spend $300 million on its Australian subsidiary, Sun Metals Corporation, which owns a zinc refinery just outside of Townsville.

 

The expansion is expected to increase the refinery's zinc production from around 225,000 tonnes per year to 270,000.

 

Sun Metals said work would begin immediately and was expected to be complete by the first half of 2021.

 

"As an organisation we've been working on this very hard for the last 18 months," Sun Metals' executive director Kathy Danaher said.

https://www.abc.net.au/news/2018-12-07/sun-...ansion/10594492

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LIVE FUTURES REPORT 02/01: LME base metals downbeat despite equity market bounce; zinc price falls below $2,400/t

Worst affected over the morning was the three-month zinc price, which fell just over 3% to trade below $2,400 per tonne and at its lowest level since September 2018. According to LME data on December 31, there remains one dominant warrant holding position currently holding 50-79% of total zinc stocks. LME zinc stocks are at their lowest since 2008. Similarly, nickel futures continue to trade in a persistent downtrend, dropping to an intraday low of $10,545 per tonne, the metalÃÆâ€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 lowest price since December 2017.

https://www.metalbulletin.com/Article/38518...alls-below.html

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Electrical failure at Teck refinery cuts production by one quarter

Teck Resources said yesterday that equipment failure affected one of four rectifiers used in the zinc refinery will reduce production by 25% for 20 weeks with a production loss of 20,000 to 30,000 tonnes.

 

Teck is one of the world's largest zinc refiners with the capacity to produce 295,000 tonnes of refined zinc per year. It also runs Red Dog Mine, the second largest producing zinc mine.

 

https://www.kitco.com/news/2019-08-27/Elect...ne-quarter.html

Teckâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s production disruption not a game-changer to zinc

Based on the estimates of productions loss from Teck Resources' Trail smelter disruptions, we think this is unlikely to be a game-changer to the overall zinc market. However, there may be other side effects to the short term market

https://think.ing.com/snaps/tecks-productio...hanger-to-zinc/

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Zinc sentiment staring into the bear pit

Steve Stakiw âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ The Northern Miner | September 2, 2019 | 12:06 pm Intelligence Markets Zinc

Where are zinc prices headed? Itâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s a question that brings distinctly different opinions and forecasts from the bullish and bearish camps.

 

While zincâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s macro-fundamentals could arguably support more robust prices, the metalâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s price has languished since its decade-high rally to $1.63 per lb. ($3,595 per tonne) in early 2018, and has struggled to break above $1.36 per lb., or $3,000 per tonne. At press time the price of the corrosion-inhibiting metal on the London Metal Exchange (LME) was in the $1.10 per lb. range ($2,420 per tonne), near its low for 2019.

 

Counter to zincâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s price weakness is the metric that global refined inventories have dropped to multi-decade lows. Refined zinc inventories in LME warehouses are at a reported 77,000 tonnes, while reported inventories on the Shanghai Futures Exchange are at 89,500 tonnes.

 

Just how tight are inventories? Total current reported global refined inventories of 250,000 tonnes represents a week of global consumption needs, which is up slightly from lows seen earlier this year, when just five days of supply resided in the metal warehouses. However, these historically low refined inventories have not been able to add much of a catalyst to prices.

 

Reflective of this sentiment, the consensus long-term zinc price forecast has recently seen downgrading by many banks and brokers to the $1.00 to $1.10 per lb. range.

 

Global trade war rhetoric over the past year, specifically between the U.S. and China, has cast a pall on most commodities and materials with muted demand, limited industrial growth expectations and lower raw material consumption levels, triggering expanded bearish sentiment.

 

This negative macroeconomic sentiment has hit Asian economies harder than most, followed by Europe.

 

One of the main economic barometers, Chinaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s Manufacturing Purchasing Managers Index (PMI), measures economic activities in the Chinese manufacturing sector on a monthly basis. PMIs have posted a general negative trend since early 2018, and have come in short on numerous forecasts over the past year. With a drop to 49.4 in June, PMIs have come in below 50 for four out of the last six months this year. The 50-point level separates expansion on the upside from contraction downwards. Julyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s forecast China PMI is 49.6.

 

Amongst the base metals, zinc specifically has recently underperformed its sister metals, having dropped as much as 35% off its early-2018 highs. Copper and nickel have seen drops of up to 20% and 31%.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The zinc market bull run is nearing an end,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Orest Wowkodaw, managing director and senior research analyst at Scotia Capita, says in a July 11 research note. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Although visible zinc stocks have finally reached critically low levels, as predicted, the negative macroeconomic sentiment overhang has served to largely ruin the party.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

read more - https://www.mining.com/zinc-sentiment-stari...o-the-bear-pit/

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Zinc Prices to decline over the outlook period

Metal News - Published on Fri, 11 Oct 2019

 

Australian governmentâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s Resources and Energy Quarterly September 2019 said that Zinc prices have fluctuated in 2019. The London Metal Exchange zinc spot price breached USD 3,000 per tonne in April, as LME inventories reached an 11-year low of 50.000 tonnes. It then started to decline, falling to USD 2,190 per tonne in early September the lowest it has been for three years. A number of tensions are at play. Zinc inventories are at record lows, owing to bottlenecks at Chinese smelters and the flow-on effects of a series of mine closures between 2013 and 2016. This helped boost prices in April 2019. However, it has not been enough to keep the price of zinc high in the face of deteriorating sentiment, an uncertain economic outlook and weak industrial output.

 

read more - https://steelguru.com/metal/zinc-prices-to-...k-period/550396

 

https://publications.industry.gov.au/public...tember-2019.pdf

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RISING ZINC OUTPUT

Zinc is also expected to move into surplus next year as rising mine production is smelted into metal after bottlenecks had blocked ore processing over the past few years.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We expect the 2020 zinc market be in a material surplus on the back of still moderate demand growth and strong growth in Chinese refined production,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ said Mikhail Sprogis at Goldman Sachs.

 

Zinc, mainly used for galvanizing in the steel industry, is expected to see a surplus of 158,000 tonnes in 2020 after a deficit of 50,500 tonnes this year, the poll consensus showed.

 

Analysts have shaved their 2020 forecast for cash LME zinc by 4% since the last poll to $2,315 a tonne, down 9% from the latest price.

 

read more - https://www.reuters.com/article/us-metals-b...l-idUSKBN1X717V

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