if you have a long term view then you are fine with zfx because they will ride zinc back up in 2009-10 and have aquired copper and gold projects by then and be increasing earnings.
its the short term that its having trouble....too much uncertainty.
Nice chart Muzz and i think the zinc has to go higher for restart up mines to actually come on line.
Here is the conundrum....if you allow all new start ups and restarts to be factored into the supply side and predict a huge surplus and this huge surplus causes the price to crash then those start ups cant all proceed and therefore all that supply is not going to be there which in turn means the surplus could be less or even possibly non existent. Then the price will surge because of this.
alot depends on traders and which way they decide to push it. If you are keen readers you will have noticed the articles starting to become bullish again on zinc at the $1 mark....could it be that all those shorts have closed out and are now going long again??? hehehehe
The market is outward looking and as such has factored in next years surplus (may or may not happen) into the current price.
So when they are anticipating a deficit in 2009 when will that be factored in??? 2009 ??? no i imagine early 2008.
Remember the funds rebalance in January....what do they do? sell their winners and buy the losers.
what else could they be buying other than zinc?
what would they be selling is perhaps the question?
cheers andrewe
ZFX
zinifex limited
