ANOTHER GREAT ARTICLE - Since mid-January an explosive rebound...

ANOTHER GREAT ARTICLE -

Since mid-January an explosive rebound in the mining sector, led by gold and silver stocks, has driven the TSX Global Mining Index up over 50%. With gold and silver surging, several analysts, including veteran Stefan Ioannou, have suggested that zinc could be the next commodity to follow suit – in a big way. The zinc investment thesis is underpinned by a current supply deficit as well as a global production rate that has dropped over 10% due to recent mine closures. The reason global producers haven’t been quick to fill the supply gap rests on simple economics. Leading research group, Wood Mackenzie, has estimated that zinc needs to hit $1.60 per pound to encourage new production. So it’s not surprising that with zinc prices at a mere $0.85 per pound, there’s not much incentive to break new ground.

That said; zinc inventories have dropped over 50% since 2013. Combine this with the fact current mine supply fails to meet ongoing demand and you have a perfect storm which could very well drive the market to a critical point that can only solved with higher prices. Haywood Securities analyst Stefan Ioannou anticipates this critically low point to occur in late-2016, noting the last time inventory levels reached this point, zinc prices spiked above $2.00 per pound.


http://www.stockhouse.com/news/news...verse-portfolio-with-gold-zinc-silver-project