Zinc highlights

摘要

The year 2005 started with a heavy fund sell off, and we warned that a similar episode of profit taking and portfolio adjustments could strike again in the first week of 2006, However, there has been no sign of any such weakness in zinc prices in January, with the market continuing its relentless advance higher. Official three-month prices ended 2005 with another new cycle high of 1,917 dollars/tonne (87.00/lb), but by January 9 they had moved up to 1,995 dollars/tonne (90.50/lb), matching the March 1989 spike to this level. They look certain to move higher still, with the magic 1 dollar/lb landmark - 2,205 dollars/tonne - now a realistic target. Our previous Q1 2006 LME cash price forecast had envisaged a price correction early in the new year.