Forget all other metals--think zinc:
Pure Metals: Forget All Other Metals; Think Zinc
Thursday, October 12, 2006
By Pure Metals
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Tight supplies prompt a closer look at zinc exploration company Selkirk Metals.
You use it.
You may not know it, but I can promise you do.
So it's no surprise, after centuries of use zinc has become one of the most important metals known to man. And while this largely ignored metal may not be as sexy as gold, silver or platinum, it plays a fundamental role in a wide range of industrial and consumer products. In fact, the bluish-white metal is now the fourth most common metal in use today -- trailing only iron, aluminum, and copper.
And that's why we're interested. It's a vital cog in the modern economic machine.
The single biggest use of zinc is for galvanizing steel. Galvanized steel is simply standard cold-rolled steel coated with a thin layer of zinc. The zinc layer protects the steel from rust and corrosion making it ideal for commercial and residential construction.
As a matter of fact, you are no doubt surrounded by galvanized steel as we speak.
The United States alone consumes nearly 40 billion pounds of galvanized steel each year for a multitude of uses resulting in steady and increasing zinc demand. But galvanized metal has a multitude of other uses as well.
Zinc is also used for making die-cast components from door knobs to car parts to nuts and bolts and tens of thousands of other products such as casings for electronic components.
And of course, zinc and copper make the alloy brass, which is used in a vast array of products. The myriad other zinc uses include sun screens, phosphors on TV screens, fireworks, paints, cosmetics, plastics…the list goes on and on.
This rapidly growing catalog of applications is progressively adding to zinc's importance in our industrialized, modern world. And with all these applications, it's no wonder why global demand has increased well over 250% in the past 45 years.
In the three decades from 1960 to 1990, worldwide zinc consumption grew at a steady, average annual growth rate of 2%. But since 1993, global zinc consumption has grown annually by 3.2%. And by all accounts this is just the beginning.
The International Lead and Zinc Study Group (ILZSG), one of the oldest and most respected nonferrous metals organizations, says global demand for refined zinc metal will increase 3.9% over last year's demand to 11.06 million tons in 2006. Next year the ILZSG expects demand to increase again to 11.35 million tons.
This demand has been and will be coming from all corners of the Earth. After falling in 2005, U.S. demand is expected to recover strongly this year with an increase of 7% over last year followed by flat growth in 2007. Similarly in Europe, it is anticipated that demand will rise by 3.4% in 2006 but remain unchanged in 2007.
Growth will be strongest in Asia where demand is forecasted to rise year over year by 9.1% in India, 4.5% in Japan and 4.4% in the Republic of Korea.
And let's not forget about China...
As with most every other commodity, escalating consumption in China has been a major factor in the increased demand for zinc.
In the recent years, China has become the largest consumer of zinc in the world increasing at 8% to 10% per year (although it increased an impressive 22% during first nine months of 2003 and 27.8% in 2004). In fact, it is anticipated that China alone will account for nearly 30% of global zinc usage by 2007.
And get this…From 1990 through 2000, China accounted for about 63% of zinc's global supply growth, resulting in massive exports that undermined prices for years.
But now because of the country's insatiable hunger for the galvanizing metal, China has gone from being a significant zinc exporter to a net importer of the metal.
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