Gavin Wendt

More evidence that zinc is the next major commodity to watch, with prices hitting a 35-month on rising motor vehicle demand. Bloomberg reports that zinc prices have risen to a 35-month high on falling inventories, amid speculation that increasing motor vehicle sales in China and the U.S. will boost metal use. Zinc stockpiles monitored by the London Metal Exchange have dropped 29% this year to the lowest since December 2010. Vehicle sales in China climbed 14% in June, an industry group said yesterday. In the U.S., new-vehicle demand surged in May and June, Bloomberg Industries said. Demand, particularly in the U.S., probably picked up, Patricia Mohr, a commodity market specialist at Scotiabank Group in Toronto, said in a telephone interview. We're seeing a bit of a recovery in industrial production in the U.S., largely linked to strong auto production. It's probably reasonably good in China as well.


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James Marlay

Gav, I have started reading a number of reports on the same front. Feels like the Australian market hasn't fully bought into this or just isn't fully aware. I know a number of resources investors are taking a 12-18 month view on Zinc and are quite bullish on the outlook. Do you have some preferred exposures?

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