“It is anticipated that recent and expected closures of a number of zinc mines over this year and next would lead to a supply crunch underpinning a rally in prices,” said Bhar, outlining factors discussed at a recent zinc conference in Istanbul. Bhar cited closures and expected closures in Canada, Ireland and Australia.
However, mine closures are the only known certainty. There are many unknowns regarding zinc’s supply/demand fundamentals, such as demand growth, substitution, how much higher prices would incentive new projects and the Chinese mining sector.
“A supply crunch does look inevitable but it’s likely magnitude and duration is highly uncertain and subject to a variety of factors,” Bhar added.
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