Post/wire say Teck sits pretty as zinc galvanizes gains
2006-01-12 07:55 ET - In the News
The Financial Post reports in a Reuters dispatch Thursday that zinc prices are set for strong gains this year as Chinese demand and a global shortage eat into stocks. The unbylined item says analysts were upbeat Wednesday as the metal soared above $2,000 (U.S.) a tonne for the first time. Zinc in percentage terms rose in value more than any other metal on the London Metal Exchange last year. Now, however, it is vulnerable to any wider sell-off by funds that have ploughed money into commodities. Majors such as Teck Cominco have little incentive to bring new or idled capacity on stream to alleviate the shortage. Teck owns the Lennard Shelf mine in Australia. It was shut down several years ago. "There are plenty of zinc deposits but, until companies decide to go ahead and mine them, zinc remains head and shoulders above the rest," ABN Amro commodity analyst Nick Moore said. "By keeping mines shut, they are removing the stock overhang that has been the blight of the metal for years." Three-month LME zinc futures rose 53 per cent in value last year. The metal hit an all-time high of $2,025 (U.S.) a tonne on Wednesday, beating a previous record of $2,000 (U.S.) in March, 1989.
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