the correlation of 6.4

Its been a number tossed around zinc circles for quite a few months now and I have used it to estimate whether or not zinc demand is softening or speeding up and whether or not the current zinc price has support or is sustainable.

Now whether they use this number as a static reference is unknown, so I actually use 6.5% against a reducing rate of stocks and against compounded increases in the zinc price. This effectively offsets any confusion about static numbers and if anything forces me to act 10% quicker than the market, unless their is a dramatic change in how things are tracking.

And there has been...

The table below shows that things are tracking quite well. Please note that some rows in the third column are numbers to today for two weeks compared against monthly targets using 6.5%...

Zinc – (6.5%):
Price_ 24.07 - 24.08 - 07.09
UK Price (2 weeks): 3121 - 3334 - 3632
Stability EOM: 3195 - 3402 - 3623
Selling pressure EOM: 3408 - 3629 - 3864

Target Gross EOM: 200000 - 187000 - 174845
Actual Gross Stocks: 200000 - 180225 - 166625
Target available EOM: 138125 - 129146 - 120751
Actual available : 138125 - 145000 - 128729

From this one can determine that the current available for sale difference required by now -8687 (138125-120751/2) has been exceeded by an actual drawdown of -9396 from available for sale (138125-128729).

In conclusion, targets across have been met to support price and headline although relevant has exceeded monthly shipping by about 8000 tonnes after 2 weeks as well.

And if you still don't believe in the 6.4% rule. Check this out. Interesting huh?

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060907:MTFH66366_2006-09-07_04-29-09_BMB001352&type=comktNews&rpc=44