Teck CEO says zing is back in zinc
Bloomberg quotes Teck Resources CEO Don Lindsay as saying that after years of oversupply, a shortage of zinc is on the horizon and the potential for the metal is “very exciting”.
“We now think that the deficit is visible, that it’s coming,” Lindsay said in an interview with Bloomberg on Monday citing mine closures and increased emerging market imports.
Lindsay’s comments come despite forecasts of supply outstripping demand by at least 350,000 tonnes (some analysts put the figure as high as 539,000 tonnes) this year further putting pressure on prices.
According to London Metal Exchange data zinc was changing hands at $2,045/tonne on Tuesday. That’s down from a record $4,000 hit early in 2007, but off lows around $1,000 at the height of the financial crisis in 2008/2009.
Many analysts agree with Lindsay that the glut may be temporary and that producers can start looking forward to 2013.
A number of large zinc mines are closing within the next couple of years including the Minmetals Century mine in Queensland (annual output is 500,000 tonnes) and Xstrata’s Brunswick mine in Canada, producing 200,000 tonnes per year according to the Wall Street Journal:
“The zinc market is heading toward serious tightness in the medium term, and the market may begin to price this in early, which could lend support to prices later in the year,” said Barclays Capital analyst Gayle Berry.
Still, while prices may benefit somewhat as the year progresses, a significant improvement is unlikely this year.