Earlier this week, Money Morning’s Peter Krauth published an article in which he states that although precious metals tend to get a lot of attention, workhorse metal zinc looks poised for a breakout. It saw an impressive 14.3-percent gain at the end of last year, and though it has pulled back somewhat since then, will likely continue to rise moving forward.
As quoted in the market news:
What could be stimulating zinc prices like this? In two words: supply and demand… simultaneously.
On the supply side, a number of significant mine closures are going to limit zinc resources for the next several years. Head of zinc trading at Glencore Xstrata, Daniel Maté, told investors recently, ‘There is likely to be a structural deficit in the zinc market in the short to medium-term future.’
Xstrata’s own Canadian mine, Brunswick and Perseverance, was shut down in 2013. Later this year, Vedanta’s Lisheen mine in Ireland is also expected to close. Even the world’s third-largest zinc mine, Century in Australia, is likely to see its last production by mid-2105 as it runs out of ore.