TSX:TECK.A - Post by User
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shakerman640on Apr 01, 2015 6:37pm
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Salman Partners comments on Teck Resources and zinc outlook
Salman Partners comments on Teck Resources and zinc outlookAccording to Salman Partners:
Zinc
China's future role in question
At its Investor Day in Toronto yesterday, Teck Resources Limited (TCK.B -svs- TSX; Cdn$17.38; BUY) said that, over the next five years, the output of zinc mines in the Western world would be flat, with expansions and restarts balanced by decreases and closures:
Teck downplayed China’s ability to expand production, noting that 80% of zinc mines in China have grades of below 5% zinc. (Our own view is that that those low grades are precisely why China should continue to act as a shock-absorber, with mines reopening and expanding any time the price of zinc runs up, as it did last year (which pushed China into becoming a zinc exporter rather than a zinc importer).)
Teck expects a global zinc deficit to make itself known in late 2015 or early 2016. (We continue to expect that 2018 or later is a more likely date.)