Zinc is amongst top picks from banks and analysts alike, as the base metal was the best-performing LME metal this year.
With that in mind, the Investing News Network (INN) has gathered the most popular zinc news stories of 2016.
Prices surged, as supply tightened, due to further production cuts and mine closures, while demand continued to grow.
Read on to see what top zinc news stories of 2016 grabbed the attention of our investor audience.
1. Zinc Prices Up 25 Percent
After a rocky start in 2016, when prices hit a seven-year low reaching $1,460 per tonne in mid-January, zinc prices were up by 25 percent by the end of the first quarter. According to Reuters at the time, the rise came as “speculators piled back into the market on hopes more production cuts would lead to shortages”. Prices for zinc and other base metals were also buoyed by hopes of more economic stimulus measures from China.
2. China Sets Growth Target
The government of the world’s biggest metals user set a range for its growth target for the first time in two decades, saying the economy would expand 6.5 percent to 7 percent this year. This announcement, made in February, improved zinc prices among other metals.
In addition, Chinese-operated MMG moved towards copper production in Las Bambas mine in Peru, after its zinc production decreased 82 percent from the previous year due to the closure of its Century zinc mine in August 2015.
3. Glencore Shuts another Zinc Mine in Australia
Black Star Open Cut mine in Queensland was shut late in October, after producing 40 million tonnes of ore and 1.75 million tonnes of contained zinc since opening in 2004. After the announcement the base metal’s price rallied to a five-year high.
Earlier in the year, Glencore was accused of allegedly ordering workers to falsify documents in New Orleans to manipulate the zinc market. The accusations against Glencore and Pacorini Metals USA indicated that they were attempting to monopolise the market to drive up the zinc price.
4. China smelters face lowest fees in four years
In August, Reuters reported that China’s huge zinc smelting industry slashed its fees for turning ore concentrates into refined metal by 20 percent. Spot treatment charges slipped to $100-$110 a ton, down by about a fifth since February, four industry sources said at the time, nearing a four-year low. The move had signaled an impending squeeze in refined zinc supplies and a further run-up in prices.
5. Zinc Soars to 9-year High
After the US election, the infrastructure plans announced by the incoming US President Trump together with credit-fueled stimulus in China, aimed at infrastructure projects and policy driven supply curtailments in coal, were the primary drivers of the base metal’s surge in prices.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.