End of commodities

After my university, my first car was a hatchback Toyota Corolla. The engine was a beautifully designed machine. I would like to say the same thing for body boards that have a quick rusty Swiss cheese look; holes that are expanding year by year.

Thanks to such episodes, automakers began to use zinc steel – "hot" immersed body panels in corrosion-resistant zinc.

However, car companies from the world's most populous countries did not commemorate this. At least not until recently.

The result? At the time that most leading analysts in the world were least expecting, the zinc market was hit by a huge bull …

Bloomberg & # 39; s The latest headline is titled "China and Rust Machines Sustainable Rally for 2016" & # 39; Best Metal. Reactions to zinc prices have risen by 60% since the beginning of this year.

Only one-third of the 19 million cars and trucks produced in China last year were made of zinc steel.

It is the same in India, where last year, consumers received a record 2 million vehicles; According to the Indian Institute of Technology Bombay, only 20% is made of galvanized steel.

Vehicle sales forecast in any country by 2020 (China 24 million, India 5 million) is very sinking.

Watch now, but …

Zinc mining resources are not for exhaustion and acquisition. It is worth noting that the demand for commodities is fulfilled in a way that no one expects until all of the price increases are noticeable.

Take a look at what happened with Nickel.

The Philippines is a major supplier of raw nickel ore. The new Duterte administration, acting in the summer, is in the midst of a "review" of three or more landmines in the nation, threatening to be removed from some commissions for environmental violations.

It's not entirely "love," but it certainly helps to love the long-running nickel price. Analysts at UBS Group AG see nickel prices up 25% next year (after gaining 20% ​​so far this year).

Of all the major industrial metals, copper is one of the most sought after. The price of red metal has been difficult all year. Since 2011 it has decreased by 50%.

Japan's largest producer, Pan Pacific Copper, sees a 40% increase to $ 7,000 per tonne by 2020. Citigroup recently made a similar forecast. Why not?

All supply and demand.

China, the world's No. 1 copper consumer, has slowed economic growth in recent years, but copper demand remains relatively stable.

But copper supplies are another matter.

At the end of last year, Glencore, one of the largest copper miners in the world, decided to make one of Africa's largest mines, producing 400,000 tonnes of copper in the global market. In Chile, the only copper supplier in the world, the state-run copper commission has announced major investment discounts by 2025, eliminating eight mining projects worth about $ 23 billion.

Now you can see where these copper price forecasts come from. Analysts at Citigroup see a widening gap between copper supply and demand. In the aforementioned Pan Pacific Copper Company, the company's head said, "Due to the absence of new mine supplies, the product will not be able to meet demand – unless prices reach $ 7,000 / tonne." He said.

With a copper price below $ 5,000 at the moment, it provides a lot of potential benefits – there is another reason to pay attention to this class of "most hated" goods.