When Mr Buffet buys stocks it means that he can see value in five-ten years time. Zinc price at current level is showing that there is end of the world. Please pay attention to the price level of around 0.5 USD in 2003 when inventories were almost five times higher than now. Zinc has become a Call Option without time decay on Reflation Recovery. Justification and reasonal explanation now to these level of prices all across commodities are that it is deleveraging and it is certanly true. But once speculators are out Industry is buying and what is more important is securing supply of Raw Materials at this distressed levels. It is interesting how much discount is needed to spur wave of buying again.
Canada Zinc Metals CZX.v with high grade deposit in Canada is trading now at 0.25CAD down from 1.0CAD few months ago and down from closed financing of 7 million dollars at 0.9CAD just two weeks ago.
Should the world continue to spin and economy will show signs of life in China, Brazil and India this distressed level of price will be a memory.
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