Ryan Cochrane of CRU Group shares his thoughts on the zinc market, including what it will take for the zinc price to rise this year.
The Investing News Network caught up with Ryan Cochrane, head of lead, zinc and precious metals at CRU Group, at this year’s Prospectors & Developers Association of Canada (PDAC) convention to get his thoughts on what’s ahead for zinc in 2019.
Speaking about what’s been happening in the zinc space so far this year, Cochrane said there are two major stories in the zinc market right now.
“You’ve got the metal market — if you look at reported inventories, they are at around 10- to 12-year lows, but on the other side of the coin, you’ve got the concentrate market, which has eased considerably,” he said.
The expert explained how spot treatment charges, which are the fees miners pay smelters to process their ore, have increased from below US$20 per tonne in early 2018 to above US$200 in 2019.
“Investors are faced with a tug of war to a degree. The metal market is [giving] very positive signals, but the concentrate market is perhaps a leading indicator of what is to come, [and it] is bearish,” he said.
Cochrane also shared his thoughts on what needs to happen for a zinc price blowout and said he is neutral to bullish for the first half of the year.
The expert added that as the year progresses, he expects a lot of mine supply to come online, which will be ultimately converted into metal. As a result, Cochrane expects the metal market to return to balance.
“Investors, we would think, would front run the story a little bit, which would put some downward pressure on prices in the second half of the year,” he said.
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 PDAC 2019 playlist.
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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.