we keep getting conflicting reports re zinc all the time nowadays
it seems that when SENTIMENT is bad (as it is for now) we get the financial media saying that china is a net exporter and that zinc will come back into surplus within the next year; some commentators still say that the supply side is tight and will remain like this for the short-medium term.
When sentiment is good - suddenely they all say that supply is very tight and critical and that demand from china is strong and will remain so
All the while, the hedge funds control a lot of the metal in their warehouses, and can manipulate supply/price.
I dont really know whom to believe; dont really know what the real story is.
All I know is that SUPPLY is still under 100,000 tonnes, and so is at a 'critical' level. When we compare supply of zinc on LME to a year ago, we see just how much the stocks have been depleting!
But how much of that supply is hedge fund related so that they can manipulate price to their favour?
What do I know re DEMAND? Well, chinas urbanising and building new cities for a massive population - that I do know! So I figure demand will run strong as long as china keeps urbanising.
Will SUPPLY meet this demand??? thats the million dollar question, as we have all these conflicting reports and hedge fund manipulation factor.
With supply under 100,000 tonnes and at critical levels, i guess zinc looks a good play
***PLUS - If iron ore and steel are in high demand; If NICKEL is in high demand , then my logic says that zinc should also be in high demand.
Nickel is steel related, as is zinc - and the chinese need a heck of a lot of steel for their urbanisation dont they??
PPL can say that nickel supply tightness is causing the price to rocket up; But again, it was said time and again not too long ago that zinc supply is in a critical state as long as its under 100,000T.
Im not an expert in metals, and maybe I havent done enough research, but shouldnt nickel and zinc fundamentals be similar given both have very tight supply???
plse give some of your views as to the fundamentals of demand/supply of zinc and its correlation to nickel
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