Sunday, March 05, 2006 9:16:09 AM
Zinc Treatment Charges - Critical for Investors to Understand
This is a graph that illustrates what the zinc industry terms "treatment charges".
Zinc treatment charges in general: Zinc mines usually have mills attached to them to concentrate the ore from 5-15% zinc as it comes out of the ground, taking it up to around 50% zinc. The term for this processed ore is "zinc concentrate". Now the concentrate needs to be processed into metal or "treated". The mine turns to "Zinc Smelters" to contract the "treatment" of their "zinc concentrates". The concentrates are analyzed for additional "credits" such as silver, lead, indium, etc. The mine then contracts with the zinc smelter to treat the concentrates and return the zinc metal to the mine to be sold.
The important thing to observe in this graph is that "spot" treatment charges are NEGATIVE(blue line). "spot" refers to concentrates that have not been contracted. This means that mines are being PAYED by smelters to treat their concentrates. There are too many zinc smelters chasing too few zinc concentrates. Mines are paying less and less to have concentrates treated, these savings go right to the bottom line. It also tells you just how tight the zinc ore supply is getting.
Kipp
This is a graph that illustrates what the zinc industry terms "treatment charges".
Zinc treatment charges in general: Zinc mines usually have mills attached to them to concentrate the ore from 5-15% zinc as it comes out of the ground, taking it up to around 50% zinc. The term for this processed ore is "zinc concentrate". Now the concentrate needs to be processed into metal or "treated". The mine turns to "Zinc Smelters" to contract the "treatment" of their "zinc concentrates". The concentrates are analyzed for additional "credits" such as silver, lead, indium, etc. The mine then contracts with the zinc smelter to treat the concentrates and return the zinc metal to the mine to be sold.
The important thing to observe in this graph is that "spot" treatment charges are NEGATIVE(blue line). "spot" refers to concentrates that have not been contracted. This means that mines are being PAYED by smelters to treat their concentrates. There are too many zinc smelters chasing too few zinc concentrates. Mines are paying less and less to have concentrates treated, these savings go right to the bottom line. It also tells you just how tight the zinc ore supply is getting.
Kipp
Join the InvestorsHub Community
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
