Think Zinc: 11 Things Investors Need to Know About This Metal

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Zinc, similar to lithium, graphite, and cobalt, is one of those commodities that comes and goes. Currently, zinc is considered to be a hot commodity again due to the metal’s increase in price over 35% in 2016.

Based on reports from Pistol Bay Mining, here are 11 things that investors need to know about zinc, a metal that is currently regaining momentum.

1. The metal is a $34 billion per year market

Zinc is the fourth most used metal in the world. In fact, it’s market is bigger than 3 markets combined: silver ($18 billion), platinum ($8 billion), and molybdenum ($5 billion).

2. Zinc production technology developed later than it did for most metals

Human beings have been smelting copper, lead, and iron for hundreds of years, but it wasn’t until later that people were able to work with zinc in isolated locations.

3. The ancients considered zinc a crucial metal

To make brass, ancient peoples would smelt zinc-rich copper ores. This was used for a variety of purposes, such as making coins, ornaments, armor, and weaponry.

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4. To produce alloys, zinc is required

Important alloys include solder, nickel silver, and brass, which is used for musical instruments and hardware applications which have to resist corrosion.  

5. The first-ever battery used zinc

Made in 1799 by Alessandro Volta, the voltaic pile used zinc and copper for electrodes. Additionally, the voltaic pile used brine-soaked paper as an electrolyte.

6. Zinc is crucial for batteries

Most of the major batteries use zinc, such as alkaline, zinc-air, silver-zinc, zinc-bromine. Without these batteries, hearing aids and military applications would not be possible.

7. Coating steel and iron is still zinc’s most important use

Roughly 50% of zinc supply is still used in galvanizing. This is done so that the steel or iron does not rust.

8. China is both a key producer and consumer of the metal

In 2015, China mined 37% of the globe’s 13.4 million tons of zinc output, while consuming 47% of the world’s supply that same year.

9. Major zinc mining companies have been closing

In 2016, China shut down 26 lead and zinc mining companies in parts of the Human province. This was ordered due to various environmental reasons. At the same time, zinc mining companies in Ireland (Lisheen Mine) and Australia (Century Mine) shut down due to a depletion of resources. This means that 630,000 tons of annual output are off the table.

10. Stockpiles are decreasing

In 2016, warehouse levels were less than half of what they were in 2013.

11. In regards to price, zinc was the best performing metal in 2016

At the start of 2016, the zinc price per pound was around $0.70/lb, but it now trades for $1.04/lb

Featured Image: depositphotos/vvoennyy