BMO Capital Markets Issues Conservative Zinc Price Outlook

There’s been a lot of optimism about zinc prices lately, but according to Mining Markets, BMO Capital Markets recently came forward with a more conservative outlook.

As quoted in the market news:

In a recent note, BMO Capital Markets calculates the metal’s upside and downside potential and concludes that while any upside left for zinc prices is limited, so are the downside risks.

BMO estimates that the closure of large mines over the next few years, including Century in Australia and Lisheen in Ireland next year, will remove about 800,000 tonnes per year from the 13-million-tonne-per-year zinc market by 2018.

However, the investment bank says that those favourable fundamentals are already baked into the zinc price.

Still, BMO expects bullish market sentiment regarding zinc to keep the price near its current level of US$1.04 per lb. (The current price, BMO notes, is well ahead of the 90^th percentile of the cash cost curve, meaning that most zinc producers should be cash-flow positive right now.)

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