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Zinc, Lead and Tin

Column: London tin squeezed as supply shock outweighs demand hit – by Andy Home (Reuters U.K. – May 22, 2020)

https://uk.reuters.com/

LONDON (Reuters) – Tightness has returned to the London Metal Exchange (LME) tin contract. Stocks are low and falling. Time-spreads have moved back to backwardation.

This is, to some extent, business as usual for the London tin market, a low-liquidity contract where brokers sometimes struggle to match lending and borrowing flows.

But it’s still a surprising outcome given a macro backdrop of sliding manufacturing activity around the world as COVID-19 takes its toll on economic as well as human health.

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Column: EU’s industrial strategy is being wrecked by coronavirus – by Andy Home (Reuters U.K. – May 20, 2020)

https://uk.reuters.com/

LONDON (Reuters) – German zinc producer Metallwerk Dinslaken (MWD) has just announced it is closing. You’d be forgiven for not noticing.

The news didn’t register with the London Metal Exchange (LME) zinc price. The company is too small with just 41 employees and annual production of 25,000 tonnes, a metallic drop in the 13.5-million-tonne global zinc ocean.

It’s also a secondary processor, converting scrap back into refined metal, and the notoriously opaque recycling sector doesn’t feature much in zinc’s market narrative. Yet companies such as MWD are supposed to be the beating heart of the European Union’s (EU) newly-unveiled industrial strategy.

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COLUMN- As demand implodes, the zinc supply chain starts to adjust – by Andy Home (Reuters U.S. – May 12, 2020)

https://www.reuters.com/

LONDON, May 12 (Reuters) – The London Metal Exchange (LME) zinc price has bounced by 20% from its March low of $1,685 a tonne to $2,020.

This is part of a broader mini-recovery across the base metals complex as the market focuses on the supply shock running alongside the demand shock caused by the spread of the coronavirus.

Lockdowns and quarantine measures have taken a particularly heavy toll of the zinc supply chain, with mine closures in key producer countries such as Peru and Mexico.

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Sense of Place: With One Last Stick of Dynamite, Two Miners Decided Joplin’s Fate – by Claire Kidwell (KSMU.org – June 18, 2018)

https://www.ksmu.org/

Today, the City of Joplin is a thriving hub for health care and transportation. But there was a time when it was no more than a collection of tents huddled around a series of mines.

Walking into the Joplin History Museum, you’re greeted by the two resident cats who watch over the building—and an entire wing designed to look like an old mine.

Old mining equipment rests in the front lawn. It’s immediately obvious how much the mining industry once influenced the area.

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The rise and fall of mining in the Patagonia Mountains – by Clara Migoya (El Inde – May 9, 2020)

https://arizonasonoranewsservice.com/

In a lot on Harshaw Avenue, off-road trucks line up in neat rows. The small town of Patagonia is seeing new activity in the nearby mountains now that South32, an Australian mining company, is running round-the-clock mineral drilling operations at the Hermosa-Taylor mine.

“The Taylor deposit, just by scale, is probably the largest undeveloped zinc deposit in the world,” said Pat Risner, president of the Hermosa project. “It’s a very strategic resource for this country.”

The Hermosa operation started more than a decade ago, when it was owned by Arizona Mining Inc., which did initial explorations and pre-feasibility studies. In 2018, South32 bought the company and all its mining claims for $1.3 billion.

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Column: Collapsing auto sector a body blow for industrial metals – by Andy Home – Reuters U.K. – March 27, 2020)

https://uk.reuters.com/

LONDON (Reuters) – France’s Recylex has just announced the temporary closure of both its German lead smelter and two battery-recycling plants, one in Germany and one in France.

The decision is due to a “strong drop in demand, especially in the automotive sector, in a context of sharply lower metal prices,” the company said. It will surely not be the last lead producer to mothball its production facilities.

Lead is umbilically tied to the automotive sector. Lead-acid batteries account for around 80% of global usage of the metal. And carmakers just about everywhere have halted their own production lines due to the spread of the coronavirus and the lockdowns on activity that have followed in its wake.

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Yukon and First Nation road agreement a ‘major step’ forward for Macmillan Pass – by Mariaan Webb (MiningWeekly.com – March 3, 2020)

http://www.miningweekly.com/

TSX-V-listed Fireweed Zinc has hailed the agreement about road upgrades that the Yukon government and the Ross River Dena Council (RRDC) First Nation reached as a “major step” forward towards the eventual development of the Macmillan Pass zinc, lead and silver project.

The agreement centres on the North Canol road and Campbell highway components of the Yukon Resource Gateway Project.

The RRDC is collaborating with the government of Yukon on the development, environmental and regulatory aspects of the two road component upgrades. The work will include bridge replacement and safety improvements on North Canol Road and construction and resurfacing part of the Robert Campbell Highway.

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Yukonomist: Three questions on Yukon Zinc and China – by Keith Halliday (Yukon News – February 20, 2020)

https://www.yukon-news.com/

What would you like the Yukon government to spend $35.5 million on? Perhaps more nurses at the hospital? Some green power plants to fight climate change? Affordable housing? More front-line teachers?

Well, never mind. Judging from Yukon Zinc’s bankruptcy case, it looks like the government will be spending it cleaning up another abandoned mine. This case is particularly troubling. First, it’s recent. The mine opened in 2012. Unlike Faro, we can’t blame this one on 1960s-era mining techniques and long-dead mining executives and regulators.

Second, it’s on the Yukon’s tab. Devolution meant gaining authority over our own resources. It also meant that we would be on the hook for mining mishaps authorized by the Yukon government. The Yukon government is already going into deeper debt each fiscal year, and a $35.5 million hit will have to come out of the hide of other public programs.

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UPDATE 1-China Feb copper output to fall on virus woes, zinc backlog builds – Antaike – by Tom Daly (Reuters U.S. – February 5, 2020)

https://www.reuters.com/

BEIJING, Feb 5 (Reuters) – China’s copper smelters will reduce output by more than 15% in February from last month due to the coronavirus outbreak, research house Antaike said, warning zinc production could also drop if transport restrictions aimed at curbing the spread of the disease are not eased soon.

Base metal prices slumped last week as the number of coronavirus deaths and infections rose, spurring fears the outbreak will reduce economic activity and metals demand in China, the world’s biggest copper and zinc consumer.

The death toll in China rose to 490 on Wednesday. Weak downstream demand, high inventories of sulphuric acid and logistical problems mean it is inevitable there will be some reduction in copper output this month, Antaike said in a note late on Tuesday, adding its estimate of more than 15% was conservative and March output may also be affected.

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Column: Nickel and copper are bull stand-outs in base metals poll – by Andy Home (Reuters U.K. – January 30, 2020)

https://www.reuters.com/

LONDON (Reuters) – Nickel and copper are the bull stand-outs in the latest Reuters poll of base metals analysts, with both set to rise in price over the next two years thanks to supply constraints and expected market deficits.

All the other base metals are expected to fall in price this year at least, with zinc and lead set to underperform over the next two years as those markets transition from supply shortfall to surplus.

Supply is the clear differentiator in the poll findings. Demand is widely expected to recover from the synchronised weakness of 2019. Or at least it was.

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Column: Where’s has all the metal gone? LME zinc market starved of stock – by Andy Home (Reuters U.K. – Janaury 23, 2020)

https://uk.reuters.com/

LONDON (Reuters) – “Zinc – Where’s the metal?” The question was posed by analysts at ICBC Standard Bank in a research note published in February last year.

One year on and the question is more relevant than ever. London Metal Exchange (LME) zinc stocks totalled 98,000 tonnes in the middle of February 2019. They now stand at 50,550 tonnes. This isn’t how the zinc story was supposed to play out.

Citi was proclaiming “zinc’s last hurrah” in February last year, the bank advising “producers to sell in to temporary tightness since our base case expects the market will loosen in (the second half of the year)”.

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Trevali posts record zinc production (Resource World Magazine – January 20, 2020)

https://resourceworld.com/

Trevali Mining Corp. [TV-TSX, LMA; TREVF-OTCQX; 4T1-FSE] said Monday January 20 that it is positioned to be a 400-million-pound annual zinc producer with a reduced cost profile until 2022.

The prediction came as Trevali released its preliminary fourth quarter and full-year production results as well as operating, capital and exploration spending guidance for 2020.

Trevali is a Vancouver-based mining company. The bulk of its revenue is generated from base metals mining at four operations. They are the 90%-owned Perkoa Mine in Burkina Faso, the 90%-owned Rosh Pinah Mine in Namibia, the wholly-owned Caribou zinc-lead-silver mine in New Brunswick, and the wholly-owned Santander Mine in Peru.

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Low inventories to frustrate zinc bears – by Pratima Desai (Reuters U.S. – Janaury 17, 2020)

https://www.reuters.com/

LONDON (Reuters) – Historically low stocks of zinc in London Metal Exchange registered warehouses are likely to fuel price volatility and confound those investors looking at an oversupplied market and expecting significantly lower prices.

Stocks of zinc in LME warehouses are close to 20-year lows at around 50,000 tonnes, having been on a downtrend since October 2015 when mining giant Glencore (GLEN.L) shut 500,000 tonnes of capacity because of low prices.

The low stocks come at a time when many market participants are expecting to see a supply surplus this year after several years of deficits, which would be bearish for prices of the metal used to galvanise steel.

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NEWS RELEASE: Early-Stage Research Hints at Big Advancements Ahead in Lead Battery Energy Storage Innovation (Essential Energy Everyday.com – December 11, 2019)

https://essentialenergyeveryday.com/

CEOs Visit DOE National Laboratory to Review Collaborative Research Project

WASHINGTON, December 11, 2019 – A three-year scientific research project currently underway at the U.S. Department of Energy’s (DOE) Argonne National Laboratory is showing promising results to unlock the untapped potential of lead batteries. Lead batteries currently supply over 70% of the world’s rechargeable battery energy needs. Yet, possibilities exist to expand their performance to meet growing energy storage and transportation demands.

The project is funded by a joint industry CRADA (Cooperative Research and Development Agreement) comprised of more than 90% of the U.S. lead battery industry. They are working with Argonne scientists to study lead and its unrealized potential for batteries, which can be employed for both transportation and the nation’s energy infrastructure.

The CRADA is part of the ongoing research and development by the lead battery and recycling industry, which spent more than $100 million in battery R&D in 2018, supports nearly 25,000 U.S. manufacturing jobs, and generates $26.3 billion in economic output.

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Tin prices face pressure from rising output, says ITA – by Eric Onstad (Reuters U.S. – November 29, 2019)

https://www.reuters.com/

LONDON (Reuters) – Rising refined tin output will cut the global market deficit next year and weigh on prices as new Chinese smelters ramp up and Indonesia also expands production, the International Tin Association said on Friday. Benchmark tin prices have already been the worst performer on the London Metal Exchange this year, sliding 16%.

“The average price has declined quite significantly from last year and we would expect next year to also be quite a difficult year for tin,” James Willoughby, manager of market intelligence for the association, told a seminar in London.

Refined output is expected to increase by 5.8% to 352,000 tonnes next year while demand rises by only 0.4% to 353,900 tonnes, according to ITA forecasts. That means the global deficit is forecast to fall to 1,900 tonnes in 2020 from 20,000 tonnes this year.

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