Zinc prices support at $1450/tonne

Zinc prices have fallen from a peak of over $4500/tonne to around $1800/tonne. You might wonder whether they have any further to fall. I believe they will at some point fall back to the $1450/tonne support. This level was an important resistance during the ascension of zince prices. The weaker economic outlook paints an unattractive outlook for zinc, but there will be a recovery in zinc demand with a resumption of building demand in the medium to long term.

Expect demand mainly from developing countries, plus Australia in short term, other Western nations in the long term. Australia will come out of this economic weakness faster than any other Western nation because of strong iron and coal prices, and a recovery in food prices. Of course it will also benefit from stronger base metals and gold in the medium term. Nickel and gold will do the best in the short-medium term.
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Andrew Sheldon www.sheldonthinks.com