Zinc - How to Invest in Zinc? [Guide]

It was discovered in Asia as early as 1500 BC, in Europe it was not discovered until the XNUMXth century. It is characterized by high fragility and a white shade. It is essential for life as one of the key micronutrients and resistant to corrosion, which makes it applicable in industry. How to buy zinc and invest in this metal? We check.

Graph - zinc

The use of zinc

The main application of zinc is to galvanize steel and iron sheets to prevent corrosion. Zinc is also used in the production of brass (an alloy of zinc and copper).

Plating

Electroplating or galvanizing of materials is the main application of zinc. Car bodies, street lamps, railings and bridge suspensions are items made of galvanized steel.

Metal alloys

Durable metal alloys such as brass or aluminum solder are made of zinc. Musical instruments and construction elements are made of zinc alloys, and wires and electrical components are soldered with it.

castings

Zinc and its alloys are suitable for the production of castings, i.e. metal parts created in molds. Zinc alloy die-cast parts are used in the automotive, electrical and construction industries.

Zinc oxide

Zinc oxide is used in numerous industries. It is used in the production of color cosmetics and soaps in the cosmetics industry, pharmaceuticals, textiles, and in the production of electrical equipment.

Zinc sulfide

Zinc sulfide is used in the production of fluorescent paints and equipment for taking X-rays.

Zinc is also one of the micronutrients essential for life. A typical human requirement for this element is 15 mg per day. Large amounts of zinc can be found in whole grain bread, groats, poultry and fish.

Zinc production

Currently, about 12 million tons of zinc are mined annually in the world. Zinc deposits are located in over 50 countries around the world. The zinc market is closely related to the steel market.

Zinc is produced by the pyrometallurgical and hydrometallurgical methods. The pyrometallurgical method is based on the reduction of zinc oxide obtained by roasting in shaft furnaces with a condenser for rapid condensation. The hydrometallurgical method consists in leaching zinc sulphide containing concentrates with sulfuric acid, then purifying the zinc sulphate and separating pure zinc from it by hydrolysis.

In addition to producing zinc from ores mined from the ground, zinc is also recycled. In the United States, recycled zinc accounts for about 25% of total annual consumption of this metal.

In Poland, zinc deposits are located in Upper Silesia and Lesser Poland. The greatest amounts of zinc are mined in Poland near the city of Olkusz.

The largest producer of zinc in the world is China, which is responsible for as much as 40% of the annual supply of this raw material. The table below shows the top 10 zinc producing countries.

The largest estimated zinc deposits are in Australia, China, Peru, Mexico and the United States.

Factors influencing the prices of zinc

Demand for zinc in China

China is the world's largest consumer of zinc. The demand for zinc is closely related to the demand for steel and the development of infrastructure. Large plans and infrastructure projects in the Middle Kingdom may protect zinc prices or increase them. In turn, a decline in demand for this raw material will cause prices to fall.

Zinc supply in China

The Middle Kingdom not only consumes the most zinc in the world, but is also the leading producer of zinc. Political or ecological decisions regarding zinc mines and its extraction may affect the prices of this metal in world markets.

Global inventory

The amount of zinc stocks is important for the future price of this metal. As stocks shrink, we can expect zinc shortages in the markets in the future and hence higher prices. Global zinc stocks are monitored by The London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE).

Demand for zinc in the USA

New infrastructure projects in the US and the good condition of the US economy will do so

Zinc production prices

The production of zinc is a multi-stage process that requires the use of coal, oil and electricity. The prices of these raw materials affect the prices and profitability of the production of this metal.

Investing in zinc

Futures contracts

Zinc futures can be found on The Chicago Mercantile Exchange (CME). Zinc contracts can be found under the symbol ZNC and are concluded every month.

One zinc contract is based on 25 tons of this metal and the price refers to the price of one tonne of zinc in US dollars.

CFDs

Contracts for exchange differences (CFDs) are characterized by financial leverage (in Europe, the leverage for commodities is 1:10) and easy transactions. Contracts for the difference in the price of zinc can be found in many leading companies Forex brokers.

How to Invest in Zinc - CFD Brokers

Below is a list of offers from selected brokers offering favorable conditions for speculating in zinc prices (CFD).

Broker
End	Poland	Denmark
Zinc symbol	ZINC	ZINC
Min. Deposit	PLN 0 (recommended min. PLN 2000 or USD 500, EUR)	0 PLN / 0 EUR / 0 USD
Min. Lot value	price * 50 USD	b / d
Commission	-	-
Platform	xStation	SaxoTrader Pro Saxo Trader Go
	REVIEW	REVIEW
	CREATE AN ACCOUNT	CREATE AN ACCOUNT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. From 74% to 89% of retail investor accounts record monetary losses as a result of trading CFDs. Think about whether you understand how CFDs work and whether you can afford the high risk of losing your money.

ETF

On the market ETFs we find one instrument that gives us a clean exposure to zinc prices. This is WisdomTree Zinc.

[Zinc] Zinc WisdomTree

• • Issuer: WisdomTree
  • Annual fees: 0.49%

ZINC is an ETF designed to give investors exposure to zinc prices in the global markets. The fund is tracked by Bloomberg Zinc Subindex, which is based on zinc futures. It is a synthetic fund that artificially tracks zinc prices and does not actually own it. The fund has assets under management of $ 10 million.

Shares of zinc mining companies

If our broker does not offer ETFs or zinc contracts, then we can go to the stock exchange and buy shares of zinc mining companies. Below is a list of the biggest players in this industry.

Teak Resources

A Canadian mining company that extracts and produces zinc around the world. It is listed on the New York Stock Exchange (NYSE). It was founded in 1906.

Hecla mining

An American company that extracts a number of precious metals and more. He deals with the extraction of metals and the search for new deposits around the world. Listed on the New York Stock Exchange (NYSE), it has an even longer history than Teck Resurces since it was founded in 1891.

Hudbay Minerals

Canadian enterprise, which produces and extracts metals in South and North America. Listed on the New York Stock Exchange (NYSE), founded in 1927.