RE:FP says zinc supply outlook weighs heavy on Noranda You missed this part.....
https://business.financialpost.com/2014/11/24/posturing-or-not-at-noranda-income-fund-units-take-a-beating/
Bold by me
And not a good situation if the fund tries to find alternative sources of supply given that when May 2017 rolls around, the zinc market is expected, according to a consultant’s report, to face tight supply conditions given the closing of several large mines.
At least two market participants have a different take. One is an investor, who is in for the “longer haul” and who describes the recent talk as “posturing” and refers to the multiple roles played by Glencore: a current supplier of feedstock, a possible future supplier, and a unitholder with board representation and a role in management.
And while Glencore may be the “natural eventual buyer for this asset,” this investor argues “in
order to set the table for the negotiation to contract the refinery services in two years, Glencore would want to convince the refinery they have no other choice than to negotiate with them.” In 2010, Glencore tried to take the fund private at $3.90 per unit.
Steven Green, an analyst with TD Securities, is the other participant. Green, the only analyst covering the fund, wrote about “solid operating results [being] overshadowed by the long term zinc supply outlook.”
As for the outlook, Green said “we have been, and continue to be, of the view that the current $0.50 payout remains safe and the plant should retain value after 2017 given its position on tidewater and access to very inexpensive hydroelectricity.” And while Green didn’t change his recommendation, he altered his target to $6 from $7.
Calls to Noranda Income Fund seeking a comment weren’t returned.
BB