Zinc was the best-performing LME metal last year, and many market participants are optimistic about its prospects in 2017. At this year’s Vancouver Resource Investment Conference (VRIC), the Investing News Network (INN) caught up with Brien Lundin, CEO of Jefferson Financial, to get more insight on the base metal.
Lundin shared his thoughts on the factors that could impact the zinc price this year, saying that he sees the metal getting up to $1.50 or $1.60. INN also asked him about what other commodities he will follow in 2017, and he said that gold is at the top of his list. “I think President Trump is going to be better for gold than I thought,” he noted.
Watch the video above for the full interview or read the transcript below. And don’t forget to check out INN’s other VRIC videos.
INN: Zinc prices soared last year, and many people are positive about 2017. What is your forecast for this year?
BL: Zinc prices did better than any other metal in 2016. I don’t think we’ll see that kind of performance this year, but we’re still going to see a very good performance. Prices are around $1.25 right now. I could easily see prices getting up to $1.50 or $1.60 this year and continuing the enthusiasm that we got last year.
INN: There are some concerns that Glencore (LSE:GLEN) may reopen its mines. Do you think that will happen, and how will it impact the market?
BL: I think that’s always a concern for zinc and base metals in general. But what you see in the zinc market is that as new mines come on or are reopened, it is simply replacing production for mines that are closing. What we’ve seen in zinc is that metal stocks have come down near five-year lows, and it looks like China’s economy is improving a bit. There’s also some enthusiasm for the US economy, and in fact demand is probably going to increase a bit this year. From the supply/demand fundamentals, we don’t really see much of a change in what we had last year.
INN: What would you say is the best way for investors interested in zinc to get into the market? And would you say it’s the right time to do so?
BL: I definitely think it’s the right time to do so, and about the only way to do so is through zinc equities. Whether you’re looking at the major producers or some of the junior explorers. There’s not a lot of options out there, especially in the junior explorers.
INN: You are now chairman of the board at Thunderstruck Resources. What do you like about the company?
BL: The company has a significant land position in Fiji and actually controls about 4 percent of the main island of Fiji, including two discoveries made by Anglo American (LSE:AAL) in the 1970s. It includes high-grade zinc and copper intersections at mineable widths, and what we’re doing right now is looking to follow up on those discoveries that were made in the 1970s. Two separate discoveries were entertaining some majors and other operators from potential joint ventures on the property, and that’s our goal — to joint venture those two and another couple of prospects we have in the land position as well, that are actually gold as well.
INN: Finally, aside from zinc, what commodities will you be watching this year?
BL: Gold. Gold really drives the entire resource market. When there’s excitement in the gold industry then you see the kind of excitement we have right now. It spreads the money into all the other sectors, including some of the base metals exploration space. But I think gold is going to perform fairly well this year. I think President Trump is going to be better for gold than I thought he would have been earlier on in the campaign.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Thunderstruck Resources is a client of the Investing News Network. This article is not paid-for content.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.