[Zinc] The conditions are ripe for a spike in the price of this metal – here’s how to invest – by Dominic Frisby (Money Week – January 23, 2019)

Money Week

Zinc is the subject of today’s Money Morning. We consider the metal, its uses, the state of the market – and we end with some possible ways to play the market, including two speculative miners. Why zinc specifically? Because there is a potential shortfall in supply which could lead to a spike in the price.

Why is zinc in the doldrums?

Let’s start with the metal itself. After iron, copper and aluminium, zinc is the fourth most used metal in the world. Its main use is in the construction industry: the frames of buildings, bridges, roofs, staircases, beams and piping all contain zinc. A coating of zinc over iron or steel protects the metal beneath from rusting.

It is also used in alloys (brass and bronze), in compounds with a range of applications, particularly in batteries – from everyday AAs and AAAs to silver-zinc batteries in aerospace – and, increasingly, in fertiliser.

The market for zinc is worth around $35bn a year. Numbers like that can be difficult to fathom, so to put $35bn in some kind of perspective, that’s around double the size of the lead and silver markets, but about a fifth of the size of the copper market. Here, for your information, is a chart showing 36 years of zinc prices.

Just over $2/lb was the all-time high in 2008. You can see the barren commodities depression of the 1990s, by the end of which zinc had slid below $0.40/lb; the boom of the 2000s; then more depression between 2011 and 2015.

For the rest of this article: https://moneyweek.com/500988/zinc-price-to-rise-here-is-how-to-invest/

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