RE:Room for zinc prices to continue increasing...Afollow-up on an old post...
https://www.marketwired.com/press-release/noranda-income-fund-announces-cash-distribution-month-january-2017-0025-per-priority-tsx-nif.un-2189993.htm
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On November 3, 2016, the Fund announced that it received written notification from Glencore Canada Corporation ("Glencore Canada") indicating its renewal of the Supply and Processing Agreement for a period of five years through May 2, 2022. In accordance with the Supply and Processing Agreement, under the renewed term commencing on May 3, 2017, Glencore Canada will arrange, as Agent on behalf of the Fund, for the purchase of zinc concentrate required by the Fund. The Fund is expecting that such purchases will be at market terms. Purchase arrangements, including market terms, have yet to be agreed. The transition to market terms will represent a significant change from the fixed processing fee the Fund has benefited from since its inception. As a result of the change to market term pricing, the Fund's financial results will differ materially, beginning in the second quarter of 2017. Cash distributions of the Fund would also be negatively impacted if, as expected, the Ordinary Units owned by Glencore Canada are exchanged for Priority Units as of May 2, 2017, resulting in the cessation of the subordination of distributions to Priority Units.
When not restricted, and as may be considered appropriate, the Fund's policy is to make monthly distributions to Unitholders. The Board also continues to evaluate on a monthly basis the expected future cash flows of the Fund as well as the reserves that may be required in the future. The Board is mindful of the expected negative impact that the transition to market term pricing will have on the Fund's operations, including its ability to sustain its distribution policy. There is no assurance that distributions will continue in future, nor is there any assurance that, if they do continue, the level or frequency of such distributions will not vary.
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frontier2014 wrote: I wonder how many processing facilities are out there that have fixed contracts that our expiring and that will be forced to compete in the open market for zinc concentrate. If this number is high then:
- processing charges will continue to go down or
- the price for zinc concentrate will go up or
- some of the refiners will be forced to reduce production or shut-down
All of the above will eventually impact the amount of zinc in the market and will drive the price up
https://www.marketwired.com/press-release/noranda-income-fund-announces-cash-distribution-month-august-2016-0025-per-priority-2152085.htm
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The initial Term of the Supply and Processing Agreement (the "Agreement") between the Noranda Income Limited Partnership ("Partnership") and Glencore Canada Corporation ("Glencore Canada") will expire on May 2, 2017. The Agreement will automatically renew for a five-year term thereafter, unless Glencore Canada provides the Partnership with written notice to the contrary at least 180 days prior. Regardless of whether Glencore Canada renews or not, after May 2, 2017, the Fund will be required to purchase zinc concentrate at market terms, instead of the current fixed processing fee.
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Noranda Income Fund owns the electrolytic zinc processing facility and ancillary assets (the "Processing Facility") located in Salaberry-de-Valleyfield, Qubec. The Processing Facility is the second-largest zinc processing facility in North America and the largest zinc processing facility in eastern North America, where the majority of zinc customers are located. It produces refined zinc metal and various by-products from sourced zinc concentrates. The Processing Facility is operated and managed by Canadian Electrolytic Zinc Limited, a wholly-owned subsidiary of Glencore Canada Corporation.
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