WITH the current focus on steel prices and supply, industry commentators may be overlooking the role of zinc in the equation.
Zinc, like iron ore, coal and manganese, is a crucial part of steel-making. It is used to galvanise steel products which are in turn fabricated into roofs and cars. While it is expected for zinc prices to spike like the prices of other steel ingredients, this has not happened.
The current market for zinc sees the metal in surplus, and prices have halved since 2006. Additionally, this condition is likely to persist for the near future.
However, finance writer Tim Boreham thinks zinc could eventually experience the same market conditions as iron ore. This is driven by the transformation of China’s developing economy into a consumer economy.
When the transition is complete, the demand for the galvanised steel used in consumer goods will soar, and so will zinc.
