re: headed down the cr.pper.defab
Whhhhooooeeee defab big call re $2/lb
I too was waiting for this level as zinc rushed up the super-cycle mountain but it never got there.
Main reason,funds.
Second reason,got too expensive when added to the base cost of steel imho.
A rise in zinc would be fine if steel remained relatively low but this wont be the case as the Big Aussie/Pommie is just about to show us with their contract price increases for iron ore with China.
This was born out by the large drop in stockpile drawdown rate to around 2/3rds of the yearly trend once the prices for base metals started to spike about $1.50
As you mention the drawdown rate MAY be on the increase again but that will only be due to the decrease in the spot price.Unfortunately if funds turn the Zn price into a circus again you can expect a slow down in stockpile drawdown again imho.In essence the high base metals prices are bottlenecking the use of zinc.
Not that Im big on charts but all base metal price charts look aweful atm and are suggesting at least one more large correction.We may see another bounce before hand but the down trend is intact and cannot just be blindly ignored.
This negativity out of the way,yes there will be solid demand for zinc for quite a while to come(if that zinc price stays at a reasonable level)
The one BIG variable in all this talk is India.India has not yet really hit its straps in regard to major infrastructure projects but it is currently in the process of building several large steel mills at Orissa or nearby in order to cater for this expected surge in demand.
Currently India is reasonably self sufficient for zinc but this may rapidly change and would really throw the cat in amongst the pidgeons as China may then be FORCED to pay for higher zinc costs as the fundamental demand forces would have a major shift to the upside.
Cant deny it though zinc concentrate should be in heavy demand for a few years at least until a large opertaion comes on line or expands,India not included of course.
India becomes a strong net importer of zinc and all bets are off and we may well see your $2/lb
(20min delay)