Replies to post #62845 on Value Microcaps Motherboard

[nutsaboutgolf2001]

ZINC INVENTORIES: Seems like a lot but when you look at the 5 year chart, it's just a minor blimp.

Looking at the year from September 05 to Sept 06 LME zinc inventories dropped from 500,000 tons to 100,000 tons (roughly reading from the 5 year chart). If (and we know it's not the case) nothing had gone into LME warehouses during that period then the daily withdrawls would have been 400,000 tons divided by 250 days or 1600 tons per day. Let's be very conservative and say, LME daily receipts averaged 400 tons per day, then the withdrawls must have been 2,000 tons per day. Since Nov 22nd when I started keeping daily records, average daily withdrawls have been 591 tons, much less than the 2,000 tons per day (also much less than the 1600 tons per day minimum daily withdrawl possibility). So daily withdrawls have dropped substantially. Is this because of decreased final usage of zinc or a current destocking effort by customers or were previous withdrawls averaging 1600 or more tons per day due to speculative hoarding? Who knows but I suspect withdrawls will soon start rising again. By the way injections to LME warehouses over the period Nov 22nd through today were on average 878 tons per day - certainly not excessive. Even if the current situation were to persist for a year more (daily injections of 878 and withdrawls averaging 591), inventories would only climb by some 70,000 tons over the next year.