Over the last few months, zinc market watchers — including FastMarkets, Research and Markets and Stefan Ioannou of Haywood Securities — have noted that while zinc prices are not likely to experience much movement for the remainder of 2013, longer term the metal’s outlook is positive.
Two similar reports, this time from HSBC Holdings (LSE:HSBA,NYSE:HBC) and MoneyWeek, surfaced in July and August. Here’s a brief look at what they say.
Silver accounts for 40 percent of the by-product material produced from zinc mining, and normally “helps reduce costs for mineral companies,” Bloomberg quotes HSBC as saying in a recent article. However, “[a] falling silver price effectively raises the cost curve in the zinc industry,” according to Andrew Keen, global head of metals and mining equity research at the bank.
While that’s not the best news for zinc miners — Keen states that ”[silver] doesn’t have to fall as far as it used to to trigger closures of mine capacity” — it does indicate that zinc prices may be set to improve. As Bart Melek, head of commodity strategy at TD Securities in Toronto, points out in the Bloomberg piece, “[w]ith lower silver prices the cost has gone up for some zinc miners. That will put more pressure on the zinc price to go up.” (more)
https://www.metal.com/newscontent/52904_think-zinc-for-longer-term-gains-analysts-reaffirm