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7.3¢ red river resources limited

Zinc Supply and Pricing, page-77

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redsceptre

5,336 Posts.

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13/07/17

09:49

Post #: 25837170
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Originally posted by fightinggreed ↑

Hi @Plext,

I think your chart is an excellent on to keep in mind and the analogy to 2006 is a strong one. I'm not sure we should expect history to repeat itself exactly though. I think history recapitulates rather than repeats. For example in 2006, I doubt there was a market participant like Glencore sitting in the sidelines with 500kT/year of idled capacity. Yes, this capacity will take 15-18 months to bring back on stream. Yes, it can be brought back on stream incrementally and will be managed to maximise Glencore's profit. But I would still expect a longer more rounded peak to the pricing this time compared to then. Glencore will want to avoid a situation where other players bring on large amounts of supply. Apparently they have calculated this price to be US$1.60/lb. Barring a Chinese recession, I think we can expect to see prices stabilise around there within about 3 months and trade at that level for the medium term.

Cheers,
Tim.

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longer more rounded peak sounds perfect

RVR Price at posting: 24.0¢ Sentiment: Hold Disclosure: Not Held
2 Upvote

0 Great analysis

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