VIDEO - Rory Townsend: Zinc Price to Peak This Year at US$3,700

The Investing News Network caught up with Rory Townsend, senior research analyst at Wood Mackenzie, at this year’s Prospectors & Developers Association of Canada (PDAC) convention to get more insight on the zinc market.

“We are expecting [2019] to be the fourth successive year of [zinc] metal market deficit,” Townsend said. Wood Mackenzie is forecasting a metal market deficit of around 500,000 tonnes.  

Townsend said he expects 2019 to be a good year for zinc, as a decline in inventories through the year should provide fundamental support to the zinc price.

“We’re seeing prices peaking at around US$3,700 a tonne in the second half of this year,” he added.

Speaking about the US-China trade war, Townsend said, “there’s been a little bit of positive sentiment [in March], with some indications that there is going to be some sort of resolution or at least communication between [the countries].”

“I think investors’ sentiment is definitely going to hinge upon whether we see progression with the escalation or deescalation of the trade disputes, and that’s going to flow through directly into metal prices,” he stated.

Townsend also shared his thoughts on smelters and why investors should pay attention to utilization rates.

“[This year] there should be increased availability of concentrate, but we are seeing some potential issues around concentrate quality,” he said.

Looking over to demand, Townsend talked about China, the world’s largest consumer of the metal used to galvanize steel.

“We’ve seen clear signals from the Chinese government that they want to pump more money into infrastructure spending to stabilize the economy,” he added.

Watch the video above to learn more about his thoughts on zinc prices, demand and supply and what’s ahead for zinc. You can also click here to view our full PDAC 2019 interview playlist on YouTube.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. 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.