Zinc Prices Under Pressure Despite Low Stockpiles
Article originally appeared on Investing News Network here.
Although zinc is one of the “least-loved metals” right now, Pasinex Resources (CSE:PSE) President and CEO Steve Williams still thinks it has an important place in the market.
Speaking with the Investing News Network at Mines and Money Americas, Williams explained that the metal is key for essential applications like rust protection and galvanizing. He also shared his thoughts on zinc’s current price performance and potential future movement.
“Last week at LME Week in London, the [forecast from one group] was about $1.10 next year, which is softer even than where we are right at the moment, and I’m thinking that’s probably the reality,” he said.
Williams explained that prices may have come down in anticipation of increased supply coming into the market, and noted that usually new production has less of an impact than expected.
He added, “but nevertheless it is coming on, and I think the market knows that. And so I think we’re probably going to have a bit more pressure on the zinc price going into next year.”
In closing, he highlighted the work Pasinex currently has on the go, including drilling just north of its Pinargozu zinc mine in Turkey, along with a SEDEX-style zinc deposit in Nevada.
Read the transcript below for the full interview.
INN: We’re here at Mines and Money Americas. It’s the last day of the conference. Are investors still interested in zinc?
SW: Yeah, I think so. Yes, I would say so. We’ve definitely had some people that have come along and are specifically interested in zinc, but zinc is the one of the least-loved metals out there. That’s probably because it’s used for galvanizing, rust protection, and I guess that’s not a glamorous thing, but it’s a very important thing, it’s what makes steel work. But yeah, people are still interested in zinc.
INN: Okay, that’s good to know. And the zinc price has had maybe a tough year if we can say it that way. You mentioned earlier today in your presentation that stocks are undervalued. Has the market performed as you expected this year?
SW: Yeah, the zinc price peaked I think [at the] end of January. It was about $1.65 per pound, at the moment it’s about $1.20 per pound. So it’s come down a lot from that, and it’s sort of a bit strange, and I got a question today about that.
It’s a bit strange because the stocks of zinc metal are still very low. I think we’re looking at about eight, nine days of stock, which is very, very low. And if you go back … there were — the stocks were a lot, lot bigger, you know, months of stock. And so we’re still very low on stock, yet the zinc price has come down. I think part of that is that the market is anticipating more production coming on. There’s a mine reopened in Australia, and I think the market’s already sort of anticipated that a bit into the price. But normally you would think that the zinc price should be a bit higher. It’s sort of an unusual position right at the moment.
INN: Looking ahead to next year, what do you expect for prices and for the market in general?