Citi warns that even little adjustments to the demand & supply balances might have significant effects on pricing because of the enormous gap between market price & manufacturing costs.
The broker has raised its annual iron ore price expectations from USD 100 per tonne to USD120 per tonne. With a 3-month time horizon, the price might increase to 150/t dollar.
However, a fresh zinc supply of about 680,000 tonnes was allowed for 2022. The Ozernoye, Gamsberg, and Kipushi projects are responsible for a significant share of the new supply. A comparable supply was authorised in 2021.
The Heermosa asset & the Dairi asset in Indonesiain North America are two sizable projects that the broker anticipates will contribute to additional supply, with the remaining supply being dispersed across other regions.
There are plenty of available tonnes. According to Macquarie, who estimates that by the end of the decade. There might be new sources of 3.5 million tonnes of zinc annually.