More uses for Zinc!Zinc and Agriculture a Winning Combination
Zinc has been on a tear lately, today reaching a near three-year high of $2,345 per metric ton (MT) after hitting $2,325.50 just last week.
As savvy market participants know, that’s largely because supply of the metal is on the decline — big mines are closing, or have already closed, and there aren’t enough new ones to replace the metal they’ve been putting out.
However, while it’s not discussed nearly as often as supply, zinc demand is also part of the equation. Mark Lackey, executive vice president of CHF Capital Markets, touched on that topic in an April interview with Sun News Network, commenting, “galvanization’s gone up a lot in China and India, they’re trying to produce cars that don’t rust out … we’ve also seen the fact that urbanization continues.” Zinc is of course also used in batteries, he said.
None of those zinc demand sources are surprising. What is a little surprising is the fact that Lackey noted that “the other area [of zinc demand] that’s really starting to grow is in the fertilizer industry, which up until recently was not the case. But people are now adding zinc to fertilizer because A) it helps yields and B) it’s very good for people in countries that are zinc deficient. It helps solve a lot of stomach problems.”
Continuing, he explained, “we’re seeing the governments of China, India and Pakistan actually supporting zinc additions to fertilizer when it’s put into crop rotation.”
That may sound a little outlandish given the dominance of potash, phosphate and nitrogen fertilizers, but Lackey’s not the only notable person who’s mentioned zinc’s agricultural applications in the recent past. Another is mining industry magnate Robert Friedland, executive chairman and founder of Ivanhoe Mines (TSX:IVN). He’s quoted in a March Salman Partners research note as saying that zinc “is now recognised, along with potash, as one of the most intense organic fertilisers.”
Like Lackey, Friedland pointed to China and India as places where zinc fertilizer is needed, stating that “