The availability of zinc seems to have increased in Q1 2015According to Salman Partners:
Zinc
The availability of zinc seems to have increased in Q1 2015
Zinc prices this morning (basis: 3-month contracts on the London Metal Exchange) were down 0.2% to US$1.06 per pound.
Noranda Income Fund's (NIF.UN - TSX) principal asset is a zinc smelter/refinery near Montreal, Quebec. The Fund yesterday released its results for the first quarter of 2015.
Zinc metal production for the three months ended March 31, 2015 was 67,804 tonnes compared to 59,544 tonnes in 2014. Production was 14% higher than for the same period in 2014... During the three months ended March 31, 2015, zinc metal inventories increased by approximately 15,300 tonnes. Zinc demand in North America is being impacted by high levels of galvanized steel [i.e. steel coated with zinc] imports, which increased 60% in 2014, resulting in high inventories of finished steel products.
The Fund (through the independent trustees) is in discussions with Glencore Canada regarding the supply of zinc concentrate following May 2, 2017 [when the contract ends]...
There is no assurance that monthly [cash] distributions will continue in the future; nor is there any assurance that, if they do continue, the level of such distributions will not vary from the level of the most recent monthly cash distribution.”
We add the Fund’s Q1 results to the following stories, which, taken together, suggest that expectations of a deficit in zinc markets are premature:
In Q1 2015, Vedanta’s refined integrated zinc production increased 21%
Source: Alliance News
In Q1 2015, Peru’s zinc production grew 18.3% YoY
Source: Metal Bulletin