Zinc is on the rise

A couple weeks ago, KBC Securities of Belgium issued an alert that the price of zinc could start its rise again as zinc supply is going to deteriorate in the coming years. The severity of this supply disruption could be twice as severe as in the years 2000.

Let’s take up a chart of the price of zinc (chart provided by InfoMine.com)

If we just look at what zinc did in the year 2000, we see that zinc had a 300% increase to its all time high at 2 USD/lb. If the supply disruptions are twice as severe today, imagine what the zinc price can do at this stage.

Let’s go on to the fundamental picture of zinc supply and demand. Read on here.

Is China Slowing Down?

These days, many commodity investors are living in uncertainty because they read on the internet that China, the largest consumer of commodities in the world, is slowing down. In this article I will take a look at the most important commodities consumed by China. We will see if our concern about China slowing down is validated.

China is already the world’s largest consumer of the main industrial metals copper, nickel and zinc. In the energy space, China is the largest consumer of coal in the world. In construction, China is the largest cement (+ ceramics and plate glass) consumer in the world. In the precious metals industry, China is the largest gold and platinum jewelry consumer in the world. Indeed, a slowdown of China will have a large impact on commodity prices.

In the full version of this article I will go through the commodities listed above and we will see that China is indeed slowing down.

China: Turning US Treasuries Into Hard Assets

A month ago I indicated in this article that China is massively buying copper. It seems that this trend hasn’t stopped yet, and it won’t stop anytime soon. The LME copper warehouse stocks level has been trending down since late last year (Chart 1), which incidentally coincided with China decreasing its margin requirements on banks, which I discussed in this article.

Today, China posted one of the largest deficits in their history, to see why this is, go to: China converting US treasuries into hard assets.