Commodity ‘Super-Cycle’ Will Take Gold and Oil Much Higher, Strategist Says

Zinc ore is typically only 5% to 15% zinc. Miners crush and separate it to make 55% zinc concentrate, which gets sent to smelters, which use high heat to turn it into 99%-plus finished metal. Last year, a smelting bottleneck left zinc ore in a glut and finished-metal prices high.

This past week, industry giants raised smelting fees by 19%. That should provide plenty of incentive to ramp up finished zinc output, so analysts consider it a bearish sign for prices. But keep an eye on construction in China—much of zinc is used to “galvanize” steel for corrosion resistance. Also, track the war in Ukraine, because smelting is energy-intensive, so any rebound in European energy supplies could revive smelting capacity there.