Zincox Share Discussion Threads

[luckymouse] 09/11/2015 12:11

poised with positive divergence - will metal indices turn up too?
Point of Control is around 11p


free stock charts from uk.advfn.com

[devonlad] 04/11/2015 10:02

Great info loanair, The chart is showing a double bottom, pretty much reflecting the Zinc price and this is starting to firm imho!

[loganair] 31/10/2015 22:48

LME zinc and sister metal lead both sank to the lowest levels in three weeks as investors realised that production cuts announced by Glencore earlier this month would take time to tighten the market and as investors zeroed in on a combination of oversupply and weak demand in major metals consumer China.

The market has largely absorbed the latest news from the US and European central banks and the focus is now back on the fundamentals of metals markets, Nicholas Snowdon, metals analyst at Standard Chartered in London, said.

"The concern most investors had was central bank policy action and short-covering moves across the complex," he said.

"I think we're through the phase where that risk could materialise, so that means that the underlying supply-demand picture will be back in the driving seat for price dynamics and on the whole that remains a bearish influence."

[loganair] 16/10/2015 18:03

Analysis:

•Zinc is testing support from the 7 DMA, which has been shaping the price higher. Sustained support from this level would signal maintained short-term upside pressure.
•The stochastics have crossed negatively and momentum is drifting lower so buying strength appears to have eased. The MACD continues to roll higher, however, indicating sustained upside pressure.
•The strong divergence in the BBs indicates reduced breakout pressure so further consolidation may be required.

Other factors:

Glencore will cut a third of its output, roughly 500,000 tonnes, by halting operations at its Lady Loretta and Iscaycruz mines and reducing production at its McArthur River and George Fisher mines. Several large zinc mines such as Century are already scheduled to end production in this quarter so we would expect increasing supply tightness to bolster prices into the end of the year.

China’s economy continues to falter – the Caixin September manufacturing PMI fell to 47.2, signalling sustained contraction in the sector. This has prompted Beijing to introduce another stimulus measure, cutting the minimum home down-payment to 25 percent to 30 percent to support the property sector. This may bolster consumption of industrial metals should it boost investment in the faltering property market.

According to the LME COTR, the money managers’ long position has extended, rising a further 4,239 lots to 7,229 lots. This was driven largely by 3,976 lots of short-covering as well as 263 lots of long buying, underlining the sustained shift toward a more bullish stance. The metal now requires the longs to regain confidence in higher prices, the potential for which has risen following Glencore’s cut announcement, if it is to continue higher.

Conclusion:

Zinc is testing key support from the 7 DMA, which has been shaping the price higher, on reduced buying strength. How the metal reacts to this level will determine the current trend.

Failure to break support from this level would signal that this remains consolidation following the strong break higher; for confirmation, we would look for a renewed push higher to target the July low.

A pullback below the 7 DMA, however, would indicate a shift in short-term pressure to the downside, opening up a re-test of support within its previous sideways trading range above the August low.

[loganair] 16/10/2015 18:00

Ivan Glasenberg, the chief executive of Glencore, has long bemoaned miners’ tendency to literally dig themselves into a hole with too much supply. As concern about Glencore’s swollen debt has hit the stock price, Glasenberg has recently taken himself at his word, ordering a temporary shutdown of some of the company’s zinc output. That caused the price of the metal to jump 10 percent last Friday.

But history suggests Glencore’s fight to raise zinc prices sustainably could be a tough one.

Taking yourself out of the market in order to reduce excess supply can be a great strategy— but primarily for those rivals who keep producing and benefit from higher prices while your own reserves stay in the ground.

Sure enough, this week the marketing chief at one of said rivals, BHP Billiton, confessed himself “quite intrigued” about all the talk of cutting production, as he hadn’t seen any capacity being shut-in that was making cash. In other words, BHP is perfectly happy to let what it sees as higher-cost rivals -- whomever could he have meant? -- do the “rational̶1; thing and withdraw.

The CEO of Vedanta Resources concurred, saying that while it was “rational̶1; for Glencore to close capacity in the face of lower zinc prices, it was equally “rational̶1; for Vedanta to keep churning the metal out at capacity. Clearly, “rational̶1; is quickly establishing itself as the passive-aggressive term of choice in mining circles these days.

Cutting supply that isn’t earning a decent return is right to do, and zinc prices may rise further next year as a result. But a zinc floor can be shaky. That is largely because, for a metals market, the zinc market is pretty fragmented: Glencore is the world’s biggest producer, yet controls only around 10 percent of global supply.




Hence, the history of the zinc industry is littered with attempts by various cartels to coordinate on supply to juice prices, be it the failed European zinc cartel of the 1930s or the “Zinc Club” of the 1970s.

Indeed, Glencore should know better than most how hard it is to tame zinc. In “The King of Oil", author Daniel Ammann describes a failed attempt to corner the zinc market in 1992 “the worst deal” of Marc Rich’s career, contributing to the trader’s decision to accede to the management buyout of his firm that formed Glencore.

In a paper from last December titled “150 Years of Boom and Bust”, Martin Stuermer, a research economist at the Federal Reserve Bank of Dallas, looked at the long-run pricing trends of zinc, lead, copper and tin. He concluded that, while supply cuts might have sustained copper prices for several years, their impact on zinc prices has tended to dissipate relatively quickly. (These reflect Stuermer’s own views rather than those of the Dallas Fed).

Instead, Stuermer wrote, sustained bull markets for zinc have been founded on demand shocks -- such as reconstruction after the Second World War, the introduction of the zinc penny by the U.S. Mint, and the China-fueled commodity supercycle of recent vintage.

This gets to the heart of the issue. In the supercycle, the high fixed costs of starting a zinc mine meant supply was slow to react. Existing producers, such as Glencore and the mining company Xstrata that it bought in 2013, could reap big profits as prices surged.

But now, China’s construction slowdown is hitting demand for steel, which ultimately drives much of the demand for zinc. The same high fixed costs for the capacity that was built to satisfy the supercycle will encourage producers to hold out as long as possible before throwing in the towel.

As you can see in the chart below, Glencore’s move has definitely helped raise zinc futures by between $100 and $150 a tonne compared to a week ago. But they remain well below where they were a year ago, or back in February 2012 when the Xstrata deal was announced. While Glencore is frustrated, buying Xstrata exposed the company much more to the mining sector’s sometimes ruinous exuberance.

[cestnous] 15/10/2015 09:22

Snippet from "Shares" today;

Up until the Glencore announcement, zinc
had fallen more than 20% year to date as the
market had been flooded with material held by
majors – most notably Glencore itself – who
were forced to liquidate assets to raise cash for
debt repayments. We always thought that would
be a short-term issue, hence why we cited high
conviction that shares in zinc recycler ZincOx
(ZOX:AIM) would soon rebound.

[devonlad] 09/10/2015 10:34

Cest, yep, looking good, rise on volumes at the moment. Looks like it was a financially driven drop, GLEN messing about! Looking for smaller good resource stocks that have missed the recent rise that the big boys have had and ZOX fits the bill, avoiding the really risky ones! Very good volume this morning.

[cestnous] 09/10/2015 10:25

Devonlad
Yes, I got back in here this am as soon as I saw that Glencore announcement :¬)

[billbyrne] 09/10/2015 07:30

Should help support the price of zinc.

[loganair] 30/9/2015 22:24

Just in case anyone missed the article in Shares mag:


ZincOx fired up for new push

Metals recycling group combats supply issue and secures Asian expansion
Daniel Coatsworth

A resolution to operational problems, a bullish pricing outlook for its end product and a major step forward with growth opportunities are all reasons to snap up metals recycling group ZincOx (ZOX:AIM) at 10.38p.

Don’t worry about current share price weakness, that is a short-term issue caused by disruption in the zinc industry. The big industry players like Glencore (GLEN) are dumping stocks to raise cash to reduce high levels of debt. Longer-term, the outlook for zinc is market deficit – demand is likely to outweigh supply which is positive for the commodity price.

ZincOx recovers metals from steel waste dust. Its plant in Korea produces a high-grade zinc concentrate and a low quality iron product. Three years of engineering problems have now been fixed with a string of positive trading updates so far in 2015. A three-week maintenance period in October will see ZincOx change a heating exchange set-up, saving millions of dollars in energy costs a year.

Concerns about a shortfall in waste dust supply from the Korean market have also been addressed with ZincOx having finally got permission to import raw material from an undisclosed Asian country. Extra transport costs will be offset by the company getting waste dust with much higher metal grades than currently processed.

It has also got the green light to build a recycling plant in Vietnam, a country with a big rubber industry where zinc oxide is a vital ingredient. Chief executive Andrew Woollett doesn’t believe construction financing will be a major problem, saying several local companies have already expressed interest and that 8.4% shareholder International Finance Corporation bought part of ZincOx to participate in future expansion.

Shares says: BUY "We see considerable upside potential."

[loganair] 30/9/2015 22:19

Glencore’s share market woes to keep a cap on copper, nickel, zinc - commodities giant Glencore’s stock market woes, which have been caused by a drop in base metals, are now in turn pushing those prices down even further.

[loganair] 30/9/2015 21:53

Broker finnCap said while its forecasts remained under review, revenue and profitability now appeared less volatile and therefore more predictable.

"Interim results illustrate a significant turnaround in operational availability and profitability at the plant level. It has also announced a new agreement to gain EAFD from non-Korean sources, overcoming recent supply restrictions. The management has also rescheduled debt to give breathing space," analyst David Buxton said in a note.

SP Angel - Conclusion: ZincOx has persevered with the KRP and has now developed the technical know-how and operating expertise to start looking for the next project to rollout the technology.

[etarip] 30/9/2015 15:27

I thought the results were as good as could be expected at this time.

Any one have other thoughts?

[loganair] 29/9/2015 20:22

Weak demand and surging inventories can keep prices under pressure:

Medium-term view

The level of $1,750 provided a floor for spot prices since 2011. The sharp fall below this level last month is technically a big negative.

The bounce-back move from the low of $1,687 has failed to breach $1,800. Prices turning lower again from the high of $1,821 suggest lack of buying interest in the market.

Given this trend, an immediate fall to $1,570 is likely. A further break below it can drag the spot zinc price to $1,500. On the charts, the next strong support is at $1,400. There is a risk of prices tumbling to test this level as long as they stay below $1,800. Only a strong break and a decisive weekly close above $1,800 will ease the downside pressure on zinc. This could open the doors for a rally to $2,000. But such strong rise looks unlikely at the moment.

The outlook for the MCX-Zinc futures contract, which moves in tandem with the LME spot price, is also bearish.

[aishah] 24/9/2015 21:27

Shares have jumped the gun too early here. Majors are offloading Zinc, so a long way to go before recovery imo.

[rathkum] 24/9/2015 12:11

ZincOx fired up for new push

This from today's 'Shares' magazine. Yet to read the full article

Metals recycling group combats supply issue and secures Asian expansion

A resolution to operational problems, a bullish pricing outlook for its end product and a major step forward with growth opportunities are all reasons to snap up metals recycling group ZincOx (ZOX:AIM) at 10.38p. Don’t worry about current share ...

[rivaldo] 21/9/2015 12:17

Zinc down to $1,670 now, at 5 year lows.

[rivaldo] 14/9/2015 11:54

Zinc price now down to $1,783 per share price Angel this morning.

[loganair] 30/8/2015 17:24

Glencore may soon be forced to shut down its McArthur River zinc mine in Australia unless it improves its environmental record and increases a financial bond covering rehabilitation of the site, authorities said this week.

The warning came after Australia’s Northern Territory officials asked the company to release figures about lead contamination around the site, under the Freedom of Information Act.

For months, residents near the zinc mine — one of the world's biggest — have complained about the potentially toxic smoke plumes and acidic run off coming from one of the mine’s waste rock dump. In October last year, an environmental assessment found nine out of 10 fish in a nearby creek had elevated and unsafe lead levels.

The NT Department of Primary Industries also found that cattle that wandered onto the site tested positive for lead above the safe limit of human consumption. As a result, hundreds were quarantined or destroyed, as acknowledged by the company in a statement this week.

The company has until Oct.1 to provide authorities with fresh data.

Only two years ago, Glencore was granted approval to increase the rate of mining from 2.5 million tonnes of ore annually to 5 million tonnes and the yearly yield of zinc and lead bulk concentrate from 360,000 dry metric tonnes to 800,000 dry metric tonnes.

It also lifted the mine's scheduled closure date by nine years to 2036.

McArthur River mine is one of the world's largest producers of lead, zinc and silver.

[loganair] 20/8/2015 15:14

SR Global - It seems to me a long term vote of confidence in Zincox.

[extrader] 20/8/2015 14:58

Hi all,

SR Global Fund now up to 16.66%, from 14.52%.

ATB

[loganair] 19/8/2015 08:31

Listening to Bloomburg, analyst from share price Angle says looking forward to this time next year most positive on Zinc out of all the metals.

[loganair] 18/8/2015 22:13

Global zinc metal output exceed usage in H1, ILZSG data shows.

Usage of refined zinc metal was 6.8 million tonnes in the first half of the year, up 2.9% year-on-year on higher demand in China and Europe. Demand in the USA dropped 3.3% year-on-year in the period. Zinc metal production was 6.9 million tonnes, up 9.4% year-on-year, on higher output in China and India, the ILZSG statistics showed.