Heavy metal fans tend to put their investment cash in gold or silver, but the wise contrarian investor looks a little deeper into the Earth’s crust for hidden treasures. Today let’s examine the winners in the zinc game and figure out what are the best Zinc stocks to buy?
Why Zinc Is So Valuable
Zinc is used in a wide range of industrial applications, including:
- Galvanization: Zinc is used to galvanize steel and iron, which helps to prevent corrosion. It is used in a variety of applications, including roofing, fencing, and construction materials.
- Brass: Zinc is used to make brass, which is an alloy of copper and zinc. From jewelry to musical instruments, and hardware, brass has a broad number of use cases.
- Solder: Zn is used to make solder, which is a metal alloy used to join two pieces of metal together in a variety of applications, including electronics, plumbing, and construction.
- Diet supplements: It is also available as a dietary supplement. Zinc supplements are often used to treat or prevent zinc deficiency, which can cause a variety of health problems.
According to Credit Suisse, which has produced several reports on the investment quality of various metals, since 2000 zinc has returned to trading 15 percent above its 110 year average.
In comparison with indexed base metal prices, zinc broke away skyward starting in 2016 with expanded mining, smelting and production facilities in China, Ireland, and Peru.
What Are Some of the Best Zinc Stocks?
Teck Resources
Teck Resources (NYSE: TECK) is a Canadian mining company that is one of the world’s largest producers of zinc. It has a diversified portfolio of assets, including mines, smelters, and refineries in North America, South America, and Africa.
As a manufacturer of Zinc, Teck is poised to prosper given that the demand for zinc is expected to grow in the coming years, due to the increasing use of electric vehicles and the need to build more sustainable infrastructure.
Zinc is also a critical metal that is used in a wide variety of applications, including batteries, construction, and galvanizing.
Teck Resources is well-positioned to benefit from the growth of the zinc market thanks to its strong track record of production and cost-management, and it is also investing in new projects to expand its production capacity.
Teck offers a 1.73% dividend yield, and has been highly profitable in the past couple of years.
HudBay Minerals
HudBay Minerals (NYSE: HBM) – As the name suggests, this is another Canadian firm, headquartered in Toronto with working mines in Peru and development projects in Arizona.
It has only been in operation for 22 years, so you could consider them as the new kid on the block, albeit with lots of potential.
Zinc and copper production, both concentrates and base metals, are their specialty, but they also are working on the discovery and marketing of a wider range of metal ores.
In line with most new entities born in the 1990s, HudBay Minerals is concerned with social responsibility and environmental impact.
Hecla Mining
Hecla Mining (NYSE: HL) has been in operation for over 160 years and is one of the largest silver producers in the world. Hecla has a diversified portfolio of assets, including mines in the United States, Canada, Mexico, and Bolivia.
If you prefer to keep your investments within the lower 48, Hecla’s central base is in Coeur d’Alene, ID, which operates four main business segments: Lucky Friday, Greens Creek, Casa Berardi, and San Sebastian.
Hecla mines feature gold and silver production, as well as zinc. It develops unrefined precipitates and bullion bars for precious metals traders.
In addition to its zinc exposure, Hecla benefits significantly from the forecasted growth in the silver market. Silver has a wide range of industrial and investment uses. The global demand for silver is expected to grow in the coming years, driven by factors such as the rise of electric vehicles and the increasing use of silver in solar panels.
Overall, Hecla Mining is a well-positioned silver producer with a strong track record and a bright future. The stock is currently undervalued and offers investors an attractive entry point.
What You Need to Know About Zinc Mining Stocks
According to a report by Goldman Sachs, zinc prices are expected to average $3,500 per tonne in 2023, up from $3,000 per tonne in 2022. The report cited strong demand from the galvanizing sector, as well as supply disruptions in China, as the main drivers of the price increase.
A report by Morgan Stanley also forecast that zinc prices will remain elevated in the coming months, reaching $3,600 per tonne by the end of 2023. The report cited the same factors as Goldman Sachs, as well as the potential for further supply disruptions in China, as the main drivers of the price increase.
Zinc prices are dependent and susceptible to macroeconomic factors, such as:
- The global economic outlook: If the global economy weakens, demand for zinc could decline, which could put downward pressure on prices.
- The demand for zinc from other sectors: Zinc is used in a variety of other sectors, such as batteries, solar panels, and pharmaceuticals. Increasing demand from these sectors would likely put upward pressure on zinc prices.
- Supply disruptions: If there are further supply disruptions in China or other major zinc producing countries, it could lead to higher prices.
The bottom line is the outlook for zinc prices is positive in the coming months and years.
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