You are correct in what you say and I have an exact example I...

You are correct in what you say and I have an exact example I can give you... TIN.

Tin is an important component in every smartphone, tablet, etc.

Now, because of very low tin prices, a lack of investment in the mining industry has caused the tin supply to shrink in very much the same way as the zinc supply.

At one stage, the analyst were calling for deficits and prices to be US$30,000 per tonne. One analyst even suggested US$100,000 per tonne. Every wannabe started to turn to tin, similar to the zinc story again but in reality, the tin price is now US$16,000 per tonne and with US dollar looking like it is rising with rates soon to be lifted (within a year), it could drop further. (Again, similar to the zinc prospects.)

I'm not saying that tin won't hit those lofted heights as the supply is short and is potentially becoming further constrained with mine closes (sound familiar) just that it isn't there yet. Note: Just like the tin operations, once the price increases, then no doubt the current operations like Century can inch out another few months and delay the inevitable. For example, they can reprocess their dumps (which will generally be cost-exclusive) to add more product.

Where does that leave future estimates of zinc?

Hopefully, as volume is continued to be eaten away, the zinc price will react in a positive direction. It's supply/demand or basic economics. However, be warned, like another famous metal, there is no shortage of zinc resources so if the price does increase and projects get funding, no doubt in later years the supply will out-trump demand and you will see an "Iron Ore Pricing" regime.

Btw, the good thing at the moment is that when the US dollar goes up, the Aussie dollar compensates, so even US$16,600 per tonne for tin still is valuable in Aussie dollar terms. Currently, tin sits at $21,564 and zinc at $2828 in Aussie. Exchange rates are important when looking at returns.