Scotibank's Mohr brightens zinc forecast

Author: Paul Ploumis
07 Jan 2015 Last updated at 04:42:15 GMT
LONDON (Scrap monster): A number of zinc mines in the world are being shut down, which will in turn lead to consecutive closures. In addition, the Scotibank had forecasted that, there will be an increase in the demand for the metal, as the demand for galvanized steel for automobiles are increasing in China.

The metal, which was being sold at 2 dollars per pound in the year 2007, has dropped lower to 0.50 dollars per pound in the year 2009. Since the year 2009, the price of the metal has rebounded. In the year 2014, the price of the metal reached 0.96 dollars per pound. Mohr is predicting that the price of  the price of the commodity will rise and reach to 1.61 dollars per pound in the year 2016, and then will again hike to 1.70 dollars in the year 2017.

Mohr stated that, there is a possibility that, the market of zinc concentrate, will shift into deficit by the year 2016.he also added that, both the commodity funds and the institutional investors have noticed that  this possibility, and they have already started taking positions in zinc.

The increase in zinc price might be helpful to offset the pummeling companies like, Teck Resources. The company has already taken down metallurgical coal off their business line.

The company operates a zinc and lead smelter, which is located in Trail B.C, and it has also recently initiated Pend Oreille zinc-lead mine, which is located in the Washington State. The company completed its first shipment of zinc oxide in the month of December 2014.

This could be the explanation for the question which is now asked by several investors, why the stock of Teck, a company which had lost about 51 percent of its value between the month of July and mid December, hiked back again to the game with an increase of 21 percent in the month of December 2014.  Zinc has also been helpful in hiking up Myra Falls Mine, which is located on the Vancouver Island. The main product of the mine is zinc, but the company also focuses on producing gold, copper, silver and gold.