Zinc prices have a strong potential to go higher on the back of continued demand from China, says Australian miner New Century. Global demand is likely to improve in the near term driven by infrastructure-focused government stimuli that are being or will be rolled out soon.
The supply side still faces disruptions with traditional underground miners restrained from improving production amid strict COVID-19 safe-distance protocols.
New Century produced 500,000mt of zinc concentrates since Century mine restarted in late 2018 which is a major milestone for the company, according to a company release. The company announced a zinc price hedging program for the remainder of the fiscal year (July-June). These put contracts would guarantee a floor price of $2,645/mt for all contracts in March quarter and 50pc of the sales in June quarter. Put contracts would eliminate the risks of downside price risks and provide full upside exposure to zinc prices above the floor price of $2,645/mt. Zinc prices have jumped almost 12pc in December quarter compared to the prior quarter, said the release.