naaman, small resources stock is on fire. You can become instant millionaires if you pick the penny right. Zinc will follow Graphite footsteps... Zinc is everywhere in the news......
Wednesday, 11 June 2014 19:27
Posted by Imaduddin 34
SYDNEY: Zinc in London and Shanghai hit the highest in around 15 months on Wednesday as improving demand met tight supply, while copper premiums fell further in China as traders faced tougher financing conditions in the wake of a fraud investigation.
A brighter picture for global growth is encouraging demand for metals with positive supply fundamentals such as zinc, with the U.S. economy gathering steam and European monetary policy looking set to stay loose for some time.
"There's supposedly a big dearth of supply on its way, yet no one is scrambling to fill that hole. That's probably because the (zinc) price hasn't been terribly compelling ... It's gearing up for a classic supply squeeze," said analyst Joel Crane of Morgan Stanley in Melbourne.
"Zinc is exposed to construction so that could be a worry but (China's demand) for autos and machinery is going pretty well," he added. Morgan Stanley estimates China's zinc demand will grow by 7 percent this year.
China's central bank said on Wednesday it will keep monetary policy steady in 2014, even as the finance ministry said fiscal spending had surged nearly 25 percent in May from a year earlier, highlighting government efforts to energise the slowing economy.
ShFE zinc rallied 2.3 percent to 15,725 yuan at one point, its highest since March 2013, while London Metal Exchange zinc edged to a new 15-month top of $2,146 a tonne, its highest since February the same year.
BNP Paribas said that while LME inventories are still high, zinc is now moving into structural deficit, with supply constraints seen becoming acute by 2016.
It sees zinc topping out at $2,300 a tonne by early 2015 and moving much higher through next year. "We recommend buying out of the money call options."
The U.S. economy has decisively turned the corner with small business confidence hitting its highest level in more than 6-1/2 years in May and the number of jobs available rising to pre-recession levels in April.
After the European Central Bank adopted a more accommodative monetary policy stance last Thursday, the focus is shifting to the U.S. Federal Reserve's meeting next week. Analysts said there could be a reassessment of the timing of the first U.S. rate increase
In other metals, premiums to obtain copper from Shanghai's bonded copper areas dropped another $10 to $70-$90 a tonne on Wednesday, according to China price provider Shmet, down from $105-125 a week earlier. (www.shmet.com)
LME copper had added 0.3 percent to $6,694 a tonne by 0744 GMT. On Tuesday, copper touched $6,628 a tonne, its lowest since May 7.
The most-traded August copper contract on the Shanghai Futures Exchange climbed 0.7 percent to 47,860 yuan ($7,700) a tonne.
China is investigating a private metals trading firm over a suspected metal financing scam at Qingdao port, police sources said, as CITIC Resources Holdings Ltd warned that metal it owns at the port may be affected by the probe.
But metals merchant and hedge fund Red Kite Group sees the apparent lack of further problems uncovered during a Chinese investigation into metals financing as a good sign, founding partner David Lilley said on Tuesday.
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SYDNEY: Zinc in London and Shanghai hit the highest in around 15 months on Wednesday as improving demand met tight supply, while copper premiums fell further in China as traders faced tougher financing conditions in the wake of a fraud investigation.
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