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Zinc concentrate is in short supply

6 August 2015

According to recent research published at Investec, zinc concentrate is in short supply. Delivery within a few months will not cover the demand. The deficit is expected to freeze the background of some mines, and hence the expected increase in the cost. Also, representatives of Investec believe that the implementation of the project mines p. Dugald and planned work will have no impact on existing market conditions. Mine development will require at least a few years before the start of the production process. Lack of supply of zinc concentrate can increase the value of zinc for several months.

MMG Company, Australia, approved the plan for the construction of an improved zinc mine. It is located to the northwest of Queensland. The project will cost 1.4 bln. USD. Zinc project by Dugald River expectations can produce about 160 thousand tons of metal and by-products. Production period is about 28 years. This figure is considerably lower than the previously developed guidance to 200−220 thousand tons. Reduced production of zinc concentrate will extend the mine operation for at least 8 years. After the start of the mine will enter the top ten major zinc mine development on a global scale.

Further expansion of infrastructure will begin in early 2016. The first batch of zinc concentrate will be produced in Ipolovine 2018. MMG CEO confident that the project p. Dugald will start working when the world market will observe a lack of zinc. It happens on the background of the mine closure. Investec analysts have long expected the development of the project p. Dugald. However, the shortage of zinc concentrate can be manifested in the world market soon enough. And, in their opinion, the situation will affect the value of the metal.

In 2014, the zinc market showed a significant increase in speculation on the background of large mines stop. Even then expressed concerns about the decline of ore supplies. Gossip about the freezing of mines in the 2nd half of the year will force prices up endeavor. However, there are other factors. Who LMEstoimost zinc fell against USD index growth. He surpassed other base metals. Growth in China IIkvartale surpassed market expectations, while reducing investors fears. On the London Stock Exchange price of zinc increased from 2060 USD / ton to 2117.5 USD / ton.

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