Hommel hot on zincHere is a snippet from his latest report.
"Likewise, regardless of the price of zinc, it will be used to make stainless steel that does not rust that is needed for things like cars, kitchen knives, and who knows what else.
Think about this: the world could sustain oil prices going from $10/barrel to $70/barrel. Hey, the inflation adjusted high of $43/barrel
from 1980 is a whopping $240/barrel! And oil is the largest commodity there is in terms of its cost. For every $100 spent on
commodities, probably $35 is spent on oil. Surely, the wheels of the world economy will not fall apart if tiny little zinc rises ten fold
from the low of $.35 to $3.50/pound.
And if oil can rise nearly 20 fold, zinc can rise 40 fold, but let’s not go there.
Here’s another key point: Several other minerals needed in steel have risen about ten fold already, such as molybdenum and
cobalt. I know of only two other commodities that have risen as much, selenium and iridium. So, 2 out of those 4 are used in steel.
Pause, and let that sink in.
Zinc is clearly headed up next, due to China’s increasing demand for steel—and this all helps to explain the parabolic price curve in zinc that we are now witnessing.
And I’m sure there may be short covering of futures contracts, too, just like there will be in silver!
So, what does that mean for little zinc explorer/developers like XXXX, that are highly leveraged to rises in the zinc price? Oh boy,
this is what had my head spinning. Are you ready for this?
XXXX can produce 398 million pounds of zinc per year, at $.25/pound, which is the lowest cost in the industry due to the new zinc/oxide electrowinnowing process."