Gold is the most talked about commodity. Oil is always in the news. Silver had had an incredible run. Precious metals have piqued interest. Copper recently made four month highs but, no one is speaking of Zinc.
Zinc is nowhere five year highs (above $2 per pound), but it has been moving upwards since the end of May. Zinc reached a low in May of 73 cents, but has now gradually pushed pass $1.00. The 30, 60, and 120 day charts are all moving in a positive direction and at the end of today, Zinc was trading at $US 1.1313 per pound.
This recent movement may be because of the weakening of the US dollar. Much like gold, the greater the strength of the dollar the less expensive zinc, and all other commodities become. Zinc has been following the gold and silver trend from an investment perspective, but unlike the aforementioned, Zinc is purely consumed. There is no zinc bullion coin, there is no zinc ETF.
Zinc is mined al over the world, but has not been economic for quite some time. The recent zinc output has been from byproduct production. But in 2009, the LME three-month zinc prices rose by 125%. Demand outside of China has been fairly stagnant, but that is slowly changing as evidenced by the price movement. The London Metals Exchange has 605,775 tonnes in stock.
Zinc’s main application is in corrosion protection. Steel companies often buy zinc to vertically integrate. Moreover, while bronze is third place and made up of copper and tin, brass is made of copper and zinc. Zinc is also used in batteries and Zinc oxide has its main use in tires and rubber products.
As the thoughts and actions of the market and possibly signaling a recovery, consumables will be, well, consumed more rapidly. Therefore they will rise in price which make metals more economic to mine in smaller amounts, lesser concentrations and in areas less geologically desirable or socio-politically stable. However, the latter two issues are a ways off, there are lots of deposits in safe jurisdictions.
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