Monday, August 4, 2014

Zinc prices to average around $2,500 per mt over 12 months: Goldman Sachs

Zinc prices to average around $2,500 per mt over 12 months: Goldman SachsAccording to latest research note published by Goldman Sachs (GS)- the investment banking major, zinc prices are likely to average around $2,500 per mt over the next 12 months. However, in immediate near-term, the prices are likely to remain under pressure. Although it maintains overall bullish view on the metal, the prices are most likely to cool off after the recent 13% rally since late-June ’14.

According to Roger Yuan, analyst at GS, the fundamentals of the metal still look bullish as large mines-Australia’s Century and Ireland’s Lisheen are expected to be depleted by mid-2015. The closure of the mines is likely to cut supplies by 450,000 mt/year and 160,000 mt/year respectively. This will further tighten supply of zinc into global market. Over a period of 12 months, zinc prices are expected to average around $2,500 per mt. The research notes states that any short term dip in prices should be used a strong buying opportunity.
The metal prices had a stellar run since late-July. The zinc prices have soared nearly 13% since then. These points to a near-term downside pressure on prices. The recent rally was mainly on the back of better US and Chinese macro economic data. Going forward, Chinese imports are likely to reduce, which in turn may bring down the zinc prices.
The spot price of Zinc at LMEselect had quoted at $2,355 per mt as on last Friday.

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