After graduating from college, my first car was a hatchback Toyota Corolla. The engine has been beautifully designed piece of machinery. I wish that I could say the same about the case, which quickly acquired a rusty Swiss cheese; hole with expanding every year.
Through such an episode, automobile manufacturers began to utilize galvanized steel – body panels "hot" into the molten bath of zinc corrosion.
But car companies in the two most populated countries in the world have not received this note. At least recently.
The result? Huge bull stamped on the zinc market, at a time when many of the world's leading analysts have least expected it …
Bloomberg a recent headline "Rusty Chinese cars, which support the rally in the Top Metal 2016", says it all. As a reaction to the price of zinc – by 60% since the beginning of this year.
Only about a third of the 19 million cars and trucks made in China last year, it was constructed of galvanized steel.
It is the same in India, where consumers bought a record 2 million cars last year; According to the Indian Institute of Technology Bombay, about 20% were made of galvanized steel.
If you think about car sales forecasts in any country in 2020 (24 million in China, 5 million in India), is a lot of zinc.
Do not look now, but …
My point is not to run out and buy stocks for zinc production. Just note that the demand for goods is often implemented in such a way that no one waits for the rise in prices will not be too obvious.
See what happens with nickel.
Philippines – the main supplier of nickel ore. Duterte new administration, which took office in the summer, is to "review" thirty minutes nation, threatening to deprive them of the Commission for the alleged environmental damage.
It's not exactly "love", but it certainly helps the cause of love for nickel prices the current rate. UBS Group AG analysts see that next year, nickel prices will increase by another 25% (after 20% so far).
Copper from all major industrial metals – one of the most popular. The price of the red metal is almost not moving the whole year. It decreased by 50% since 2011.
Nevertheless, Japan's largest producer Pan Pacific Copper, up to 2020, will grow by 40% to approximately $ 7,000 per ton. Citigroup recently I made a similar forecast. Why?
All the matter in supply and demand.
Demand for copper has remained relatively stiff, despite the fact that economic growth in China – the world's number one consumer of copper – has slowed down in recent years.
But the supply of copper – is another matter entirely.
At the end of last year of Glencore – one of the largest miners in the world – decided to take up the largest mines in Africa, taking to the world market of 400 000 tonnes of copper. In Chile, the single largest supplier of copper in the world, state copper commission announced large cuts in investment until 2025, eliminating the eight projects to develop mines in the amount of nearly 23 billion dollars.
Now you see, where did these price forecasts. The Citigroup analysts see the growing deficit between supply and demand of copper. In the above-mentioned copper Pan Pacific Copper president, said: "The products will not keep up with demand due to a lack of new proposals on the shaft – when prices reach the $ 7,000 (per tonne)."
Now the copper price is below $ 5,000 per tonne, which gives a lot of opportunities for potential profit – and one more reason to follow this class, "most hated" goods.