Zinc contrarian play in the inflation bailout times. MTS.v

So now when we are back into negative real rates and inflation is coming on I believe Zinc is worth our attention. Last time demand has picked up in 2003 when zinc went ballistic until mid 2006. It is recovery play on inflation expectation. Bailout will bring liquidity, demand will be recovering in western world and will still be strong in emerging markets. The problem with the price was that it forecasted increasing of production and Zinc surplus in 2009-2010. With spot price as low as 0.75 US/lb Chinese companies start cut production. Huge deposits which were supposed to come online are not in the pipe any more. Ozernoe deposit in Russia with more then 150 million tones of Zinc ore were supposed to be build into mine for 600-800 mil dollars. Now Lundin Mining is going out of the project and price tag has risen to 1.5 billion. Lundin Mining is struggling with low prices and high operational cost in Euro. Huge deposits are situated in Iran, Afghanistan or in Africa. Will you be able to finance them now? With record low inventories we are getting into rising demand. Housing market in USA will recover one day and even if it will happen in 2010-2011 you will not put new mines online within this time. Rising price will bring attention back into this market, this time most interesting will be deposits in a stable political environment which could be financed into production with infrastructure in place. Consolidation in the industry will be also very important driver.