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Issue - April, 2006
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Zinc hits record high
Zinc prices hit all-time highs in March, with the spot price in New York ending the month at US$1.255 per pound--up 40% in just the last three months and more than 90% in the last year.
At the same time, stocks of the industrial metal, (used mostly in galvanizing to protect against corrosion), have dwindled to 297,375 metric tons in warehouses, the lowest level since July 1991.
The recent price ascent has caused some experts to raise their price projections. David Thurtell, commodity strategist for Commonwealth Bank of Australia, recently said he will revise a previous $2,400 per metric ton average estimate to around $2,650.
The supply-demand outlook means prices could rise another 10% to 15%, especially if disruptions such as current cyclone-related plant closures in Australia continue to spur sentiment, Thurtell said.
But not everyone is sure prices will continue to rise. Holding company ABN Amro came out with a 2006 average forecast of $1.05 a pound or $2,300 per metric ton. It said record prices mean risks to zinc’s market share as consumers seek cheaper alternatives.
Not surprisingly, recent zinc prices are encouraging metals companies to dust off old projects. Vancouver-based Teck Cominco Ltd., the world’s biggest zinc producer, and Toronto-based Falconbridge Ltd. are looking at Lennard Shelf, an Australian mine mothballed since 2003.
Winnipeg-based HudBay Minerals Inc. is reopening the Balmat zinc mine, mothballed since 2001, in New York State this year.
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