After a couple of miserable years on the price front, zinc is back in town.

It stands to reason too, given 60% of the metal goes in to galvanising steel for use in construction (51% of zinc’s market), transport (20%), and infrastructure (16%).

They are all sectors benefitting from monster stimulus packages in the major economies designed to get things moving post-COVID.

That has come through in the record global steelmarket, led by China. And there is no point in making all that steel without galvanising it to protect it from rusting away inside of 12-18 months.

Because zinc production was hit hard in 2020 by the impacts of COVID on major production sources in South America, the supply of the metal tightened up nicely, just as the demand pick-up kicked in.

That has continued in 2021, with zinc scooting off to $US1.32/lb in response. That compares with zinc’s annual average of $US1.15/lb in 2019 and $US1.02/lb in 2020.

The current price is not boom time stuff. But it is a price at which the industry can once again make decent returns, particularly as the price smelters charge to process concentrate supplies from mines has collapsed, boosting returns for the miners.

Most analysts have zinc retreating back to around $US1.10/lb as production sources hit by COVID come back into production. Much of that negativity is because zinc is not seen to be a metal of the future like copper where demand is forecast to increase 2.3 times by 2050.

But Canada’s Teck, the world’s biggest zinc producer, has demand growth for the metal not far behind copper with a 2.1 times increase in the same timeframe. No one is sure where that supply will come from as China, a big producer of zinc, is struggling to maintain production because of falling grades and environmental crackdowns.

What is known is that the zinc market remains very tight, and that at these price levels, the ASX zinc stocks stand to benefit as the impact of sharply higher prices bumps up earnings for the producers, and encourages the developers and explorers to get on with things.

More than you might zinc

There are more ASX stocks with zinc exposure than you might think. But Garimpeiro has narrowed his focus to the following four:

New Century (ASX:NCZ, trading at 21.5c): It has been tough slog for the company ever since its zinc tailings retreatment operation at the Century mine in north-west Queensland got going in November 2018.

But the zinc price is up, treatment charges are down, and importantly, recovery rates at Century are up. It all adds up to record profitability which will be confirmed in its June quarter report. Exploration for hard-rock zinc sources could also surprise to the upside.

Venturex (ASX:VXR, 72c): It owns the shovel ready Sulphur Springs project in WA which comes with the benefit of having a copper leg.

It has been a star performer in recent times because of the imminent arrival of Bill Beament, formerly CEO then chairman of Northern Star, the gold producer he took from nothing to an $11.5 billion gold powerhouse in under 14 years. Can he do it again in base metals?

White Rock Minerals (ASX:WRM, 52c): Exploring the big time potential of its Red Mountain polymetallic project in central Alaska which already has a 9Mt resource grading 13.2% on a zinc equivalent basis.

The 2021 drilling program is underway, including work at the Last Chance gold project. Also owns the shovel ready Mt Carrington gold-silver project in NSW which is now being advanced in a joint with ASX-listed Thomson Resources (TMZ).

Orion (ASX:ORN, 3.4c): The South African focussed Orion made a splash recently with its pick-up of the Okiep copper project. But it remains committed to getting its Prieska copper-zinc project into production, the only hold up being financing, which the higher zinc price, and bumper copper prices, should be done soon.

Studies have Prieska slotted as a low cost producer of 22,000tpa of copper and 70,000tpa of zinc.