Large amounts of supplies are poised to drive zinc toward prices of $1.50 per pound within the next four years, states a research note penned by mining analysts with mining services firm Hallgarten & Company.
Mining Weekly reports the company indicates the mineral has bounced back to prices above $1 per pound ever since having stooped to its low prices in 2008. But in May 2010, the mineral also was impacted by economic troubles in Europe while also feeling the crunch of global market weakness as of late.
Stability appears to be readily available for zinc at prices between 85 cents per pound and $1 per pound.
“This relative stability is good but not much consolation to anyone in the space,” a Hallgarten & Company research note states. “This includes end-users. The zinc complex has needed a sustained recovery in prices to tease new projects off the drawing boards and into the financing phase.”
The next several years are projected to see net losses of roughly 1.4 million tons of zinc as mines close, analysts told Mining Weekly. Two Xstrata-owned mines in Canada, Brunswick and Perseverance mines, are set to close next year. Brunswick mine presently is producing well beyond the projected mine life.
Those mines closing would remove as much as 350,000 tons of metal capacity per year, the publication reports.
The price of zinc dropped 5.3 percent last month in China, host of the globe’s second largest economy, according to Metal Bulletin. Losses were attributed to the reduced pace of the global economy and a slow-down of Chinese demand.
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