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EZM and HBM earnings will rock!
Look at TECK-Cominco's earnings! WOW!!
Teck's first-quarter profit jumps 119 pct
Mon Apr 24, 2006 7:00 PM EDT
TORONTO (Reuters) - Teck Cominco Ltd. <TEKsvb.TO>, the world's top zinc producer, reported a 119 percent increase in first-quarter profit on Monday, benefiting from higher metal and coal prices and a gain related to the sale of investments.
Teck, which also has copper, coal and gold-mining operations, said it earned C$448 million ($392 million), or C$2.19 a share, for the three months ended March 31. That compared with a profit of C$205 million, or C$1.01, a share in the same period a year ago.
Results included after-tax gains of C$58 million from the sale of investments.
Analysts had expected Teck to earn C$1.79 a share, according to Reuters Estimates.
Teck, which also has a 15 percent stake in the Fort Hills oil sands project in Alberta, said cash flow from operations rose to C$461 million from C$288 million last year. Figures are before changes to non-cash working capital items.
Vancouver, British Columbia-based Teck mined 150,000 tonnes of zinc in the first three months of the year, mostly from its Red Dog mine in Alaska, and produced 74,000 tonnes of refined zinc.
That compared with 161,000 tonnes of zinc and 71,000 tonnes of refined zinc in the same period a year earlier. It produced 59,000 tonnes of copper, compared with 61,000 last year.
Teck said it plans to restart its closed Lennard Shelf zinc operations in Australia. Lennard is a joint venture between Teck and Falconbridge Ltd. <FALlv.TO>. The plan is subject to the final approval of both companies.
The average cash prices for copper and zinc were $2.24 and $1.02 a pound respectively in the quarter. That compared with $1.48 per pound of copper and 60 cents per pound of zinc in the same period last year.
Last year, Teck bought a stake in Canada's booming oil sands industry, where the margins are higher than in base metals.
Cheap Natural Gas = Cheap Fertilizer
Here is another YAR.OL article on Trinidad & Tobago expasion:
Yara to Explore Expansion in Trinidad
Friday February 17, 2:54 am ET
OSLO, Norway, Feb. 17, 2006 (PRIMEZONE) -- Yara International ASA is reviewing a further development of its operations in Trinidad in line with the company's strategy to expand its production capacity in regions with competitive gas prices.
ADVERTISEMENT
Yara has now initiated a project to explore further opportunities to leverage its existing infrastructure in Trinidad. The scope of the project includes increasing and optimizing the ammonia capacity and adding downstream and industrial products like urea, ammonium nitrate and urea ammonium nitrate (UAN, a liquid fertilizer). The study will especially evaluate the opportunity of technical ammonium nitrate production for the growing markets in Latin America.
The scope of the new production facility could imply investments between USD 600-1000 million, depending on the scheme selected. Yara plans to make a decision by year-end 2006.
Yara intends to join up with local partners for the project and use its downstream and industrial system to market the products.
Yara is the sole owner of Yara Trinidad Ltd., which owns and operates an ammonia plant in Trinidad and Tobago. Yara also owns 49% of the shares in Trinidad Nitrogen Co., Ltd. (Tringen), a joint venture with National Enterprises Ltd., an entity controlled by the Government of Trinidad and Tobago. Yara operates and manages the two ammonia plants owned by Tringen.
Yara International ASA is a leading chemical company that converts energy and nitrogen from the air into essential products for farmers and industrial customers. As the number one global supplier of mineral fertilizers and agronomic solutions, we help provide food for a growing world population. Our industrial product portfolio includes environmental protection agents that safeguard air and water purity and preserve food quality. Yara's global workforce of 7,000 employees represents great diversity and talent enabling Yara to remain a leading performer in its industry.
http://www.yara.com
Bobwins - Ethanol, LNG, New area for us to look...FERTILIZER
I have been thinking about a way to invest in alternative energy and I think nitrogen fertilizer produced from the most disadvantaged natural gas on the planet may be a great place to look.
LNG has the big problem of super cold temperatures and dangers of handling.
Ethanol still takes nitrogen fertilizer(derived from natural gas) to grow the corn, diesel driven tractors/combines to harvest it, and mega btu's to cook the mash and run the distilation columns to process it into usable fuel.
I ran across this article last night and I think YARA (YAR.OL) has a homerun in the works. Use Australian gas from the middle of no where, convert it to nitrogen using air and a catalyst, put it on a ship to asia, sell it to produce crops for food and fuel. Please read this:
http://www.norwaypost.no/cgi-bin/norwaypost/imaker?id=23686
World scale ammonia plant opens in Burrup
Yara International ASA strengthens its position in Asia with the opening of the world's largest greenfield ammonia plant in Burrup, Western Australia. Yara, which holds a 30 percent stake in the plant will market and sell 100 percent of the production.
The Burrup plant will employ nearly 100 people at full production. The plant has an annual production capacity of 760,000 tonnes of liquid ammonia.
"The Burrup plant combines production based on a competitive natural gas price with proximity to important growth markets in Asia. The partnership in Australia helps strengthen our position as the world's leading supplier of ammonia," says President and CEO of Yara International, Thorleif Enger.
The plant is owned by Burrup Holdings Pty Ltd. which is 30 percent owned by Yara with the balance owned by the Oswal and Rambal families.
"This is part of Yara's strategy to increase the proportion of production in low-cost gas regions in order to reduce our average cost for fertilizer products. As a consequence of recent initiatives, including our ownership stake in Burrup, over 30 percent of our production is now based on gas from low-cost regions," says Enger.
The plant uses natural gas from the Australian North West continental shelf as feedstock to produce liquid ammonia. The company has entered into a take-or-pay agreement for the take-up of natural gas from the Harriet JV over the 25-year life of the plant. The contract also includes an option to prolong, as well as flexibility to optimise production.
The plant, which is located in Karratha on the Burrup Peninsula, in Western Australia's resource-rich Pilbara region has been developed over the past four years at a capital cost of more than USD 575 million.
"Working with our partners in Australia creates a win-win platform for further growth in Asia," says Enger who points out that the fertilizer and nitrogen chemicals markets in Asia are large and growing more rapidly than the world average.
Total output will be piped from the plant direct to the Port of Dampier for export markets mainly in growth regions in Asia. Based on an agreement entered into in 2002, Yara will market and sell 100 percent of the production from the plant.
Consequently, Yara added two new 60,000 cubic meter vessels to its shipping capacity in 2004. First shipment from the Port of Dampier is scheduled for the first half of May.
RRainman - I am interested in your list of long term stocks. I am nearly 90% invested in NOK, Canadian$, and A few Euro$ denominated stocks. Almost everything involved with natural gas, oil, copper, zinc, or the comanies that help extract it from the earth. In a depreciating USD environment, with global expansion happening outside of the US, I feel this is the best move I can make to maintain my personal standard of living.
I have 1 year plus holds on:
DNO.OL (NOK)
PAR.OL (NOK)
Short term holds on:
EZM.TO (Can)
HBM.TO (Can)
SDRL.OL (NOK)
MRS.L (U.K.)
ARD(USD)
ARSD(USD)
BGH.V (Can)
TRMAZ (USD)
I have never owned this few stocks, all concentrated in tangible "old economy" assets.
I have also purchased a diesel Jeep Liberty avg 26mpg (parked my full size Dodge truck avg 10mpg), installed a stove that burns corn in my home, and payed off all of my short term debt leaving only the mortgage on my home.
Thanks for getting me started over a year ago when you posted on PAR.OL.
I hope you will share your list with us. You should look hard at EZM and HBM both will rocket when zinc production explodes top and bottom line numbers in the second half of this year.
Kipp
Copper over $3.00 Zinc over $1.50
http://www.kitcometals.com/
RRainman, where have you been?
Good to see you post on Ihub again. I was worried you were gone for good. I got a nice long term capital gain on DNO and PA Resources thanks to you. Don't seem to get many of those long term gains. I will look at Imperial Energy.
Thanks!
Kipp
cl001 - HudBay
Why don't I listen better! I have done well on BWLRF TGB, sold both and rolled into EZM at an average of $1.24. I am late into HudBay, but it is early. We may see gains in these mining stocks that make us stand back and shake our heads. I think commodities are the next big thing. Wall Street ran techs and then realestate, now it is time for physical commodities. If you recognize the fact that it is not just speculation driving the base metals, there really is a supply demand problem, this bull has a long way to run. Don't forget to add in a weakening dollar.
Buy the dips! (I used to hate that saying during the tech bubble, add "new economy" to that too"
Good Luck!!!
Kipp
HudBay - EuroZinc Bob......Wins!
I have added a bunch of HudBay recently thanks to Bob posting about what they have coming. Very similar to EZM, some of the only near term zinc that is coming to the market mid 2006. Thanks Bob!
Here's the beef:
TSX SYMBOL: HBM
HudBay Announces Reopening of Balmat No. 4 Zinc Mine
NOV 9, 2005 - 18:41 ET
WINNIPEG, MANITOBA--(CCNMatthews - Nov. 9, 2005) -
Ore production expected early in second quarter, 2006
HudBay Minerals Inc. (TSX:HBM) (HudBay) announces that, through St. Lawrence Zinc Company, LLC (SLZ), it expects to reopen the Balmat No. 4 Zinc Mine (the Mine) in the Balmat zinc mining district of New York state.
The Mine has been maintained to a high standard, during care and maintenance, since 2001. The Mine includes a 3,200 ft. deep shaft, underground development to five ore zones and extensive mining equipment as well as a 5,000 ton per day concentrator. SLZ also owns approximately 52,000 acres of exploration land in the Balmat district.
"Balmat is a readily available zinc source and will be accretive to HudBay's performance when first ore is produced early in the second quarter of 2006." said Peter R. Jones, President and CEO of HudBay with respect to the reopening. "I am pleased Balmat is reopening where many prior employees live and where the state of New York encourages new business with economic incentives. Work to prepare the Mine for its reopening will begin during the fourth quarter of 2005."
Based on mineral reserves, resources and a planned increase to resources from an underground exploration program, the mine life will be approximately eight years and have a capital cost of approximately US$20 million. First ore production is planned within five months building to full production of an estimated 635,000 tons per annum, within 35 months. Operating costs including concentrate treatment are expected to be US$0.40 per lb. of zinc while total costs including capital is expected to be US$0.48 per lb. of zinc over the mine life and based on a zinc price of US$0.56 per lb. for three years and US$0.50 per lb. thereafter produce a greater than 20% IRR after tax.
At November 1, 2005, HudBay recalculated the Mine's mineral reserves and resources in compliance with National Instrument 43 - 101 based on high grade selective mining. The mineral reserves are estimated at 1,858,532 tons at 11.2% zinc and mineral resources at 1,387,249 tons at 12.9% zinc. These results have been prepared under the guidance of Kim J. Lau, B.Sc., P. Geo., a Senior Mineral Resource Analyst of HudBay's wholly-owned subsidiary Hudson Bay Mining and Smelting Co., Limited (HBMS) and Gary M. Allen, M.Eng., P.Eng., employed as Manager Mines Technical Services by HBMS. Both Ms. Lau and Mr. Allen are designated as Qualified Persons with the ability and authority to verify the authenticity and validity of this data.
At full production, the Mine will produce approximately 60,000 tons of zinc metal in concentrates which are planned to be processed at the Canadian Electrolytic Refinery in Valleyfield, Quebec with an option for up to 40% of the concentrate to be treated at HudBay's zinc plant in Flin Flon, Manitoba.
About HudBay Minerals Inc.
HudBay Minerals Inc. is an integrated mining and metal producing company that operates mines and concentrators in northern Manitoba and Saskatchewan and a metal processing complex in Flin Flon, Manitoba. The company also operates a zinc oxide production facility in Brampton, Ontario and owns the Balmat zinc mine in New York State.
Certain information regarding HudBay set forth in this document, including management's assessment of HudBay's future plans and operations contains forward looking statements that involve substantial known and unknown risks and uncertainties. These forward looking statements are subject to numerous risks and uncertainties, some of which are beyond HudBay's and management's control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, risks related to the integration of new operations, operating costs, fluctuation of foreign exchange rates, imperfection of reserve estimates, environmental risks, industry competition, availability of qualified personnel and management, timely and cost effective access to sufficient capital from internal and external sources. HudBay's actual results, performance or achievement could differ materially from those expressed in or implied by, these forward looking statements and accordingly, no assurance can be given that any of the events anticipated to occur or transpire from the forward looking statements will provide any benefits to HudBay.
FOR FURTHER INFORMATION PLEASE CONTACT:
HudBay Minerals Inc.
Tom Goodman
Vice President, Human Resources and Technical Services
(204) 687-2380
(204) 942-8177 (FAX)
nelson1234 EZM downgrade
This downgrade is interesting. We are expecting earnings of $.08 - .10 for Q1. I am hoping for $.45 minimum this year as EZM adds zinc production in Q3 and Q4. P/E of 10 we are looking at $4.50pps.
Buy the dips!
Kipp
Sell RGEN buy RGMI.ob
Thanks!
Chinese Economy Grows 10.2 Pct. in 1Q
By ALEXA OLESEN Associated Press Writer
© 2006 The Associated Press
BEIJING — Chinese President Hu Jintao announced Sunday that China's economy grew faster than expected in the first quarter of the year, heightening concerns that the breakneck expansion could spark inflation and drain environmental resources.
Hu said the economy grew a stunning 10.2 percent in the first three months of this year compared with the same period last year, well above previous estimates.
Hu's announcement came just days before he heads to the United States for talks with President Bush that are likely to focus on Washington's record $202 billion trade deficit with Beijing.
"We do not seek high-speed economic growth," Hu said during a meeting with a former Taiwanese opposition leader in Beijing. "We are concerned about the pace of development and the quality and the effect of our growth. We are also concerned about saving our resources, environmental protection and the improvement of our people's livelihood."
China's economy has grown at an annual pace of about 10 percent for the past three years. Chinese leaders worry that surging economic growth could spark inflation or touch off an investment binge into unneeded projects that will leave already debt-laden banks with more bad loans.
Hu's announcement followed a call from China's Cabinet on Friday for new measures to clamp down on investment and bank lending to head off signs that the economy may be overheating.
The economy has consistently overshot official targets for the past several years. Perhaps partly for that reason, a government report in January did not offer forecasts for 2006.
Premier Wen Jiabao and other members of the State Council on Friday called for the policy changes after examining data on the money supply and investment in buildings, factories and other fixed assets.
Among the troubling signs for the economy, the central bank said Friday that new loans in the first quarter reached $156 billion _ more than half the bank's target for all of 2006.
"The reason why the economy has grown at this pace is because of the banks' lending terms," said Andy Xie, an economist with Morgan Stanley in Hong Kong. "If they don't want to economy to grow so much, they need to tighten their lending terms."
Xie said the government might have released the numbers _ which had been due to come out later this month _ "to assure America that China is growing fast and that there is demand for America products."
Bush has vowed to hold Hu accountable to fair trade practices, singling out the Chinese currency, which the U.S. says is undervalued, makes Chinese exports cheap and has contributed to the ballooning trade deficit.
Government economists had predicted between 8.5 percent and 9 percent growth for this year, in line with estimates by the World Bank and many private economists.
Copper, Zinc Price Forecasts Raised at Macquarie Bank (Update1)
April 13 (Bloomberg) -- Copper and zinc prices will rise because of supply disruptions and rising demand, said Macquarie Bank Ltd., Australia's biggest investment bank.
Cash prices for copper, used in making wires and pipes, may average $5,590 a metric ton, or $2.54 a pound, this year from $3,681 a ton last year, Macquarie Bank analysts including Brendan Harris said in an April 13 report. The bank raised its copper price forecasts by 15 percent from an earlier prediction.
Copper and zinc reached records yesterday in London as metal producers struggle to meet demand led by China amid declining stockpiles and mine stoppages. The International Monetary Fund may raise its forecast for global economic growth this year partly because of expansion in Japan and the rest of Asia.
``We have again been proven too conservative as the improving macroeconomic backdrop has shored up the demand outlook while ongoing supply disruptions continue to dampen the supply-side response,'' the Macquarie analysts said.
Grupo Mexico, the world's seventh-largest copper producer, yesterday said a 20-day strike at a copper concentrator in Mexico may force it to suspend May copper deliveries to clients.
Macquarie revised its prediction of a global surplus of refined copper for this year to a deficit. It raised its copper price forecasts for 2007 to 2010 by between 8.3 percent and 48 percent.
The bank increased its 2006 zinc prices forecasts by 4.7 percent to $1.23 a pound, or double last year's average price of 62.6 cents on the London Metal Exchange, or LME. Zinc is used to galvanize steel.
``We continue to expect virtually all of the LME zinc stocks to be run down by the end of the year,'' the bank said.
Zinc inventory monitored by the LME has halved since 2003 to 264,625 metric tons, or less than 10 days of global consumption.
Macquarie joins other investment banks in revising its metal prices forecasts. Deutsche Bank on April 11 raised its average base metal prices forecasts for 2006 by 14 percent.
To contact the reporter on this story:
Tan Hwee Ann in Melbourne at hatan@bloomberg.net;
Last Updated: April 12, 2006 21:00 EDT
Copper Surges to Record for 7th Day as Demand to Exceed Output
April 13 (Bloomberg) -- Copper prices surged to a record for the seventh straight session in London on signs that demand for the metal used in wiring and plumbing will outpace production.
World copper use will rise 5.4 percent this year to 17.9 million metric tons, exceeding output by 10,000 tons, Goldman Sachs Group Inc. said in a report yesterday. Demand rose 1.7 percent last year, the bank said. The metal will average $5,587 a metric ton in 2006, up 16 percent from a previous forecast, Goldman said. Prices have gained 37 percent this year after climbing 40 percent in 2005.
``We have enormous demand from customers this year, which is much higher than expected,'' said Peter Schubert, marketing manager of Germany's MKM GmbH, Europe's fifth-largest copper fabricator. ``Our stocks are very low.''
Copper for delivery in three months climbed $7 to $6,110 a metric ton at 2:24 p.m. on the London Metal Exchange after reaching $6,135, the highest ever. Prices have climbed 6.7 percent this week, the biggest such gain since late January.
On the Comex division of the New York Mercantile Exchange, copper for May delivery gained 1.85 cents, or 0.7 percent, to $2.79 a pound after reaching a record $2.803. A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
Prices have been buoyed by a decline in global inventories and strikes at mines. A 20-day strike at La Caridad, Mexico's second- largest copper mine, may force Grupo Mexico SA to suspend May deliveries to clients, the Mexico City-based company said yesterday. The mine produces 250,000 tons of copper annually.
LME Inventories
Copper stockpiles in warehouses monitored by the LME dropped 100 tons to 111,650 tons today. That's equal to less than three days of global consumption. Inventories have dropped 8.4 percent this month.
As much as 11,775 tons of LME copper stockpiles are under ``canceled warrants,'' which means the metal has been bought and will move from warehouses, according to LME data.
Copper has also benefited as hedge funds and other investors seek investments that have delivered greater returns than stocks and bonds. The Standard & Poor's 500 Index has gained 3.2 percent this year. Benchmark U.S. Treasuries have lost about 1.5 percent, according to Merrill Lynch & Co. indexes.
``There's so much money in the market coming from the investment community,'' said Bo Samuelsson, president of Sweden's Elektrokoppar AB, a copper-wire producer. ``The market is no longer reflecting consumers and producers.''
Zinc fell $10, or 0.3 percent, to $2,995 a ton. The metal earlier reached a record $3,040.
Stockpiles monitored by the LME rose 8,600 tons, or 3.3 percent, to 273,225 tons, the largest gain since June 2005.
To contact the reporter on this story:
Chanyaporn Chanjaroen in London at cchanjroen@bloomberg.net
Last Updated: April 13, 2006 09:31 EDT
MRS.L Thanks RRainman....where ever you are?
Melrose to Buy US Company with Egypt and Texas Assets for £265 Million
http://www.oilvoice.com/Melrose_to_Buy_US_Company_with_Egypt_and_Texas_Assets_for_26/6168.htm
ARSD - Saudi Mining $3.8B Aluminum Smelter
"Third economic pillar
The Saudi Arabian General Investment Authority says that it hopes the mining sector and processing of metals will become a 'third pillar' of the economy after hydrocarbons and petrochemicals.
Maaden says the smelter project will help create more than 11,000 jobs and increase the kingdom's GDP more than $30 billion over 25 years and result in an improvement to the balance of payments of $533 million a year.
While the Saudi move into the aluminium sector follows other well established Gulf smelters, Maaden believes that because it can draw on Saudi-mined bauxite and the availability of cheap gas supplies its productions costs will be lower than any other GCC aluminium producer.
Such is the potential demand for the metal that there have been hints that another Saudi 500,000 tpy aluminium smelter could also be developed by a private consortium in the developing Jubail 2 industrial city."
http://www.ameinfo.com/82840.html
HudBay - EuroZinc
Anyone interested in zinc please view the presentation on lead and zinc furnished by Teck Cominco at this link:
http://www.teckcominco.com/
"Lead and Zinc - PDAC 2006
March 2006
Andy Roebuck's presentation on Lead/Zinc given during the Commodities and Market Outlook Session at PDAC."
Only one way for zinc price to go in the next few quarters....UP!
FinancialAdvisor - HudBay HBM.TO
Would you please look at this one and tell me if you see a pull back to mid 8's in the cards?
Thanks,
Kipp
HudBay pullback, asking for T/A advice
Anyone care to look at the HudBay chart and see if they think it will pull back to mid 8's or so? Looks like a couple of gaps were left to fill.
Thanks,
Kipp
SDRL.OL - I have pdf of Merrill Report.
Anyone that would like a copy of the report can send me a PM with email address and I will be happy to send a copy.
I jumped on SeaDrill when Hank first mentioned it. I am greatful for the tip and have an 80%+ gain. This is another one that I hope to hold long term.
THANKS HANK!
HudBay Warrants
From the HudBay website:
"* 30 WARRANTS ENTITLE THE HOLDER TO ACQUIRE ONE COMMON SHARE OF HUDBAY MINERALS INC. AT A STRIKE PRICE OF $3.15 PER SHARE. THE CURRENT SERIES OF WARRANTS EXPIRES AT THE CLOSE OF BUSINESS ON DECEMBER 21, 2009."
Bobwins Hudbay Warrant
Can you open this link? I found it listed as HDB.WT
http://www.tsx.com/HttpController?GetPage=QuotesViewPage&SelectedSymbol=HBM.WT&RowNumber=1&a...
Bobwins Hudbay Warrant
Hello Bob, been really busy with my day job. I see you found a warrant that trades in Canada, do you have a ticker for it?
Thanks,
Kipp
ARSD 2morrowsGains
I have quite a few shares of ARSD as I added more on recent low volume sell off. The only reason I own any ARSD is because they are fully reporting pink. They need to get to the OTC soon. The refining business should carry the day. The mining potential is a loooooooong shot. Anyone interested in this stock needs to read the 10-Q's and K's and do some serious soul searching as there are many issues covered in those reports including pollution, loan default, hedging, etc. The other thing I like is they never issue press releases pumping the mining claim. Some here think it is a scam but the lack of pumping is a plus. We will know a lot more if they report on time at the end of this week. They were late reporting last year but someone posted on this board that they were told by the company the filing would be on time this year, we shall see.
Guardedly optimistic on this one.
Kipp
EZM chart
If you have never used BigCharts "Java" charts just click the "Java" button and move your pointer over the chart. You can also use the wheel on your mouse to change many settings as you view the chart.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ezm&sid=0&o_symb=ezm&fre...
EZM still has upside due to zinc projects.
I am holding all of my EZM shares and will add more the minute they announce the Aljustrel mine reopening. I am hoping for the rare long term hold on this one.
Here is the increase Eurozinc expects to see from zinc and lead production planned to start in 4 months.
It is still early for EZM. It still is trading as a copper miner with no value given to zinc and lead!
Kipp
Look at the zinc inventory drop, price up!
I have been watching zinc inventories drop nearly everyday for over a year now. No end in site as there are no new mega mines being developed.
This is the price graph for the same period.
I expect the same trend to continue well into 2007.
Zinc's rally has forecasters reworking models
24 March 2006
Zinc's rally has forecasters reworking models
Source: Dow Jones
Zinc's rally to all-time highs this week, bringing year-to-date gains to 30% as investors hone in on shrinking warehouse stocks, is expected to result in a slew of price upgrades from forecasters.
The galvanizing metal traded up to $2,582.50 a metric ton on the London Metal Exchange Thursday, the latest in a series of all time highs as strong China-led demand combines with tight mine supply to shrink warehouse inventories.
At 0546 GMT Thursday the metal had slipped back slightly to $2,565 as Asian players stayed on the sidelines awaiting further price direction from London.
The metal's dizzying 18% gains since March 8 have taken share prices of producers along for the ride with world number two Zinifex Ltd. hitting a record high in early trading Friday and Perth-based Kagara Zinc Ltd up 11% on the day.
The gains have some market forecasters reworking their 2006 price projections.
David Thurtell, commodity strategist for Commonwealth Bank of Australia, said Friday he'll be revising a previously expected $2,400 average to around $2,650 as LME stocks fall below the important 300,000-ton mark.
At the same time India's Hindustan Zinc Ltd. has raised its zinc prices by INR3,000 to INR130,100 a metric ton effective Friday "in line with the rising international prices," a company spokesperson said.
"The supply demand balance is in chronic shortfall," Thurtell said. "Some people say the funds don't look at the fundamentals and are just trying to drive it, but they don't drive price direction, they just add some heat to it."
The supply-demand outlook means prices could rise another 10%-15%, especially if disruptions such as current cyclone-related plant closures in Australia continue to spur sentiment, Thurtell said.
Profit taking may precede further gains
National Australia Bank minerals and energy economist Gerard Burg said he too is likely to upgrade his 2006 average forecast of $2,336/ton, warning however that some profit taking may precede further gains.
"We see prices continuing to rise during the year but the real question is whether we have pushed up a bit too high with speculative interests," Burg said. "I wouldn't be surprised if it came off a little."
"Having said that, the big driver continues to be declining stocks so there is a strong fundamental element to the increases all the same," he said.
Burg added a market deficit beyond half a million tons this year would be seen as a buying opportunity in futures markets.
The metal's chart patterns, closely tracked by many investors, are also supportive of more gains, said analysts.
Dow Jones technical analyst Dave Rogers said zinc appears to be targeting the Fibonacci expansion point of $2,785 in the next few months, while $2,165 offers strong underlying support.
Further driving investor sentiment are occasional "wild cards" such as the Northern Territory government's environmental concerns over Xstrata Plc's application to switch to an open-cut operation at its McArthur River mine.
Xstrata has said it will shut the mine if the application is rejected, thereby stripping up to 3% of global supply from 2008.
High prices may drive consumers away
Not everyone is so sure, however, with ABN Amro coming out this week with a 2006 average forecast of $1.05 a pound or around $2,300 a ton.
Besides the argument that fund interests are overshooting fundamental indicators in the base metal complex generally, ABN Amro said record prices pause risks to zinc's market share as consumers seek cheaper alternatives.
In addition, high prices and shrinking stocks mean producers are likely to give serious thought to expanding production, said ABN Amro commodities analyst Warren Edney.
Countering that, however, are long lead times and cost constraints, meaning new project development opportunities in the next couple of years are scarce.
"Even if someone made a decision today, you're talking at least three years to get something into production, particularly as most of these zinc deposits are in unstable political environments or difficult-to-get-to places," Kagara chairman Kim Robinson said in an interview this week.
"I'd expect prices to keep going up."
ARSD Change in Directors or Principal Officers
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS
By email dated March 14, 2006, Mr. Mohammed Al Omair, advised the Registrant that he will be resigning his position as director of the Registrant and as member of the Executive Compensation and Audit Committees, effective April 1, 2006.
http://biz.yahoo.com/e/060321/arsd.pk8-k.html
Big oil firms struggle to find new reserves
I am holding DNO.OL and PAR.OL, they may even become targets of big buyout trend that is coming.
http://today.reuters.com/business/newsarticle.aspx?type=reutersEdge&storyID=2006-03-17T131810Z_0...
Forbes on Oil Sand Wildcatter
http://www.forbes.com/home/free_forbes/2006/0327/140.html
Canadian Gas/Oil/Tar Sand Investors...read this
I don't want to get political or get in trouble here but I think this is a good read for those of us invested in Canadian energy. This paper was presented to the provincial and national Canadian governments last week. Please comment.
Fueling Fortress America
Executive Summary
The Athabasca tar sands of northern Alberta contain an estimated 175 to 200 billion barrels of recoverable oil — the largest known hydrocarbon deposit ever discovered. This estimate is based on using existing technologies. Using newer technologies, as much as 2.5 trillion barrels of oil might be recovered — but the costs would be enormous.
Development of the tar sands has already begun, with three large companies — Suncor, Syncrude, and Albian — producing large quantities of crude, and six more massive projects in the early stages. As the soaring price of oil makes these resources financially more viable, many other leases are being explored. An estimated US$100 billion is expected to be spent on tar sands development over the next 20 years.
Though this may sound like a few lifetimes of oil, there are serious social and environmental issues related to the extraction of this bitumen: the provincial boom-and-bust cycle that is being created, including labour, infrastructure and materials shortages; the water intensivity and resulting pollution; and the significant volumes of natural gas it requires. These concerns raise the question of whether the current rate of expansion (planned growth from one million barrels a day to six million barrels a day, most of it destined for export) is reasonable or sustainable.
In terms of the social costs, the dramatic expansion of the tar sands development has created labour shortages, exacerbated by infrastructure shortages in Fort McMurray, that increase the cost of living in the area. The boom is also causing materials and construction costs to shoot up across the province. The rapid pace of extraction has also led to inequities between the provinces, with Alberta in an embarrassment of riches, part of which is being thrown at local infrastructure spending, escalating the boom. In the absence of any plan, provincially or nationally, for pacing the development to maximize the jobs and returns to the province over the long term, there is instead a bonanza, using foreign workers and union-bust-ers in the short term, while offering royalty holidays.
The natural gas situation is even less sustainable. Conventional natural gas has already peaked and is on the decline. This is a key source of power generation for Alberta. As the tar sands consume the gas, the province is already returning to coal for power, and losing value-added jobs in the petrochemicals sector. As that clean source of fuel expires, the tar sands are turning to non-conven-tional gas sources, all of which have higher social and environmental costs: the Mackenzie Valley pipeline, coal-bed methane, and in-situ (extraction of the gas from the bitumen). There has not been adequate public debate on the impacts of coal-bed methane, in spite of the huge landscape impacts of the well-intensive drilling and
Fuelling Fortress America
pipelines needed, and the likely impact on water tables in an area already short on water. The in-situ strategy is no better, as it has huge carbon dioxide emissions, while the tar sands operations are already among Canada’s largest industrial polluters.
Most of the oil to be taken from the tar sands will go to the United States. In effect, the Athabasca deposits will be the centrepiece of a new continental energy grid. Its main purpose will be to provide a secure supply of fuel for the American industrial and military machines. Canadians are already paying a steep price for feeding the voracious American addiction to the dwindling world reserves of oil and gas.
Given that the rapidly increasing exports of Canada’s oil and gas to the U.S. puts our own energy security as a nation in jeopardy; that Canada, despite being a petroleum-producing country, is already forced to import nearly half of the oil its people need; that Canada has less than a 10year supply of conventional oil and natural gas remaining; that most of the tar sands oil is earmarked for export to the U.S., and most of the natural gas from the North is also intended for the U.S. market or to fuel extraction of the tar sands crude — the continuation of current energy policies is clearly not in the national interest.
There may be ways of developing the tar sands that could contribute to Canada’s long-term energy needs, including the inevitable transition to renewable energy sources. But, shockingly, there is no coherent national or provincial energy policy to address this need. Nor is the federal or any provincial government conducting the research or public consultation needed to formulate policies for meeting the world energy crisis — or even for assuring an adequate ongoing supply of energy for Canadians.
To be viable, any decisions or policies on energy we arrive at should be based on a complete understanding of all aspects of the tar sands development. It is a project that brings with it enormous economic, social, and ecological costs, as well as raising concerns about our role as suppliers of oil and gas — and soon electricity and even water — to feed the ravenous U.S. appetite for Canada’s resources.
This report makes the following recommendations to both federal and provincial governments:
Athabasca tar sands development:
. • Place a moratorium on further expansion
of the tar sands development until a pub-
lic inquiry is conducted and completes
its report on the social and environmen-
tal impacts of this mega-energy project,
appropriate provincial plans are in place
to maximize jobs over the long term and
address the provincial energy and water
needs as well as sustainably pace the de-
velopment, and there has been proper na-
tional debate on the implications for Can-
ada’s peace-promotion policy and national
energy security;
. • Rescind direct government subsidies to the
oil industry in the tar sands, and replace
the minimal 1% royalty rate with a more
realistic higher rate;
. • Place a moratorium on construction of the
proposed Mackenzie gas pipeline until out-
standing Aboriginal land claims, threat of
permafrost damage, and the waste of ener-
gy involved in using gas to fuel the produc-
tion of another form of energy have been
satisfactorily settled; and
. • Transfer to the government of the North-
west Territories the constitutional powers
to set its own fair rate of royalties on the
extraction of natural gas in its jurisdic-
tion.
Fuelling Fortress America
National Energy Policy Measures:
. • Give the National Energy Board a clear mandate to oversee Canada’s overall energy needs, and arm it with the policy and regulatory tools required to carry out this mandate;
. • Restore the previous practice of maintaining a national 25-year supply of oil and gas reserves to meet domestic needs;
. • Take steps to increase Canadian and provincial ownership of the oil and gas industry in Canada (including stopping the sell-off of Petro-Canada) and develop new forms of public ownership and control;
. • Obtain (like Mexico) an exemption from NAFTA’s proportional sharing clause, or,
failing that, withdraw completely from NAFTA;
. • Conduct a public review of energy price-setting practices with a view to restoring the capacity of our governments to regulate energy prices and, if necessary, roll them back; and
. • Initiate, with the provinces, a national strategy and timetable for reducing dependence on fossil fuels, conserving our remaining supplies of oil and natural gas, and massively increasing investment in renewable energy alternatives such as solar and wind power.
Bobwins - Tar Sands - Politically Challenged?
http://www.edmontonsun.com/News/Alberta/2006/03/07/1477122.html
I read your links to the potential problems of Canada not wanting to fuel our energy pig addiction.
Here is a link to get the Fueling Fortress America paper. I have not read it yet.
http://www.policyalternatives.ca/index.cfm?act=news&call=1308&pa=BB736455&do=Article
This may be the beginning of a political hot potato that may lead to moritoriums on growth????
Thanks for the lead, will do more reading.
Kipp
cl001 - EZM - zinc just printed $1.11/lb
I am holding all of my EZM shares longer term due to zinc. Copper will support currnt price providing low risk. When Aljustrel zinc/lead mine re-opening is announced LOOK OUT!
Zinc inventory will break below 300,000 tons next week. The inventory continues steep dive, headed for ZERO. It was 600,000+ tons 1 year ago, and over 1 million tons counting hidden inventories 2 years ago.
I documented zinc's history in these posts:
http://www.investorshub.com/boards/read_msg.asp?message_id=10005958
http://www.investorshub.com/boards/read_msg.asp?message_id=10006321
http://www.investorshub.com/boards/read_msg.asp?message_id=10001833
Kipp
EZM - Still early compared to TGB BWLRF
EZM- cl001 No TSX/S&P PR released over US wires
I checked for news in US when I didn't see it on Yahoo....Nothing on US wires:
http://news.google.com/news?hl=en&ned=us&ie=UTF-8&scoring=d&q=eurozinc+S%26P&btn...
Shows you we are under the radar. Also nothing on company site.
Zinc inventory continues to drop like a space shuttle on re-entry!
http://www.kitcometals.com/charts/zinc_historical_large.html#lmestocks_6months
Boat is fully loaded here waiting for Aljustrel news next!
Good Luck!
Kipp
Hurricane hype headed to a headline near you!
Check out all of the recent Hurricane Headlines:
http://news.google.com/news?hl=en&ned=us&ie=UTF-8&q=hurricane+forecast
MEK - Sorry Bob, I remember your power grid posts back on RB.
You have been too early on several stocks. You've also been way ahead of the pack on lots of ideas. I am sticking with you on energy and metals, I think we're still in the early stages of a longer term bull run that will wind up in a speculative bubble. Did you see this article:
http://www.kitco.com/ind/Hamilton/printerfriendly/mar102006p.html
Kipp
Zen lunatic - ronpopeil and MEK
This is the only post that came up on a search of this board for MEK. Too bad we didn't find it back in November true, but it could be early if they are awarded more huge contracts. The eanings are reported Wednesday.
"Posted by: ronpopeil
In reply to: None Date:1/4/2006 6:20:36 PM
Post #of 37733
any thoughts on MEK?"
Kipp
Metretek increases 2006 projections
The Denver Business Journal - December 23, 2005
Metretek Technologies Inc. is increasing its revenue guidance for 2006 by more than $30 million.
In its Nov.14 release of third-quarter financial results, Metretek (AMEX:MEK) projected that 2006 consolidated revenues would be approximately $49 million, $30.5 million of which was expected to come from its PowerSecure subsidiary. Subsequently, on Nov. 21, the company reported that PowerSecure had received two verbal orders for distributed generation projects that are expected to earn more than $45 million for 2006 revenues.
"Documentation of these orders is progressing and is now at a point where we feel confident that all the projects that were the subject of the Nov. 21 release will be completed next year," said W. Phillip Marcum, president and CEO of Metretek, in a statement "Accordingly, our current expectation is that consolidated revenues in 2006 will be in the range of $80 million to $85 million."
Marcum noted that PowerSecure's revenues are now projected to be in the range of $60 million to $65 million in 2006.
"In part for competitive reasons," said Marcum in the statement, "we are not currently updating our guidance regarding consolidated net income in 2006; however, when we do so, we anticipate that such guidance will be substantially higher than the Nov. 14 net income guidance of approximately $3.8 million, given the anticipated increase in revenues."
According to Marcum, guidance for 2005 remains unchanged, with net income from continuing operations expected to be approximately $2.4 million, or 19 cents per basic share, on revenues of $42 million to $44 million.
Metretek Technologies Inc. through its subsidiaries PowerSecure Inc., Metretek Inc. and Southern Flow Companies Inc. provides energy technology products, services and data management systems to industrial and commercial users and suppliers of natural gas and electricity.