Top Zinc Stocks on ASX: Promising Investments 2023
Team Veye | 24-Aug-2023
Zinc (Zn), or pure zinc, is a bluish-white, shiny metal resistant to corrosion. Zinc is brittle at normal temperatures but malleable and ductile. Zinc has a low melting point and is a good conductor of electricity. About 30% of the zinc used in the western world comes from recycled materials. The construction, transport, and appliance manufacturing industries use large amounts of zinc, mainly as anti-corrosion coatings on sheet steel, steel beams, vehicle panels, chain-link fencing, guard rails, and light posts. Galvanizing accounts for about half of the total global consumption of zinc. The widespread use of zinc as a protective coating is mainly because of its resistance to weathering. Zinc was used in Rome and China more than 2000 years ago as a component of brass, which is a zinc and copper alloy. The Romans and Chinese smelted zinc ores such as zinc carbonate with copper to produce brass, which was used for coins, containers, amour, and jewelry. Zinc ore is also produced at Rosebery in Tasmania, Elura in New South Wales, and Scuddles and Gossan Hill in Western Australia. Sometimes high-grade zinc silicate ore has been mined from the small Beltana deposit in South Australia. Australia today has more than 20% of the world's known zinc-lead resources and is the largest producer and exporter of these metals to the rest of the world, as reported by Geoscience Australia. The majority of Australia's zinc mines are underground operations that are highly mechanized. Ore is diamond drilled and blasted in large volumes and transferred to underground rock crushers by large loaders and trucks before being hoisted to the surface in skips or driven directly to the surface by truck via a spiral access tunnel called a decline.
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What are ASX Zinc Shares?
Australia's zinc ore-producing companies listed on the Australian stock exchange are called ASX zinc shares, and traders do buy and sell transactions on ASX zinc shares. There are large-cap, mid-cap, and small-level companies proactively involved in exploration and mining activities in Australia. Some good ASX zinc companies that are ASX zinc shares from higher market cap to lower market cap (dated as of August 24, 2023) are as follows:
• BHP Group Limited (ASX: BHP); market cap: $221.38 billion
• South32 Limited (ASX: S32); market cap: $16.57 billion
• RIO Tinto Limited (ASX: RIO); market cap: $39.99 billion
• OZ Minerals Limited (ASX: OZL); market cap: $9.51 billion
• Sandfire Resources Limited (ASX: SFR); market cap: $2.92 billion
Best Time to Invest in ASX Zinc Stocks to Buy
Zinc prices have started falling precipitously from 2022 onwards after gaining speedy momentum in late 2020. There is a saying: Always buy at a low and sell at a high. Allocate funds when good ASX companies are available at a lower price rather than buying them on high to enjoy the benefit of capital appreciation when industrial demand is set to go up. ASX zinc stocks have also performed significantly well post-2020, with phenomenal returns. Investors who had loaded positions in ASX zinc stocks by then would have experienced an excellent surge in portfolio growth. There are well-known ASX zinc stocks that have delivered good returns in the last year. For example: Azure Minerals Limited (ASX: AZS) has given a return of +1166% in the last year. (YTD as of August 24, 2023). RIO Tinto Limited (ASX: RIO) performed a 10.96% return in the last year (YTD as of August 24, 2023).
Investing in such ASX zinc stocks may yield a better return over a long period of time. Investors must make a well-informed decision before allocating funds to ASX zinc stocks.
Pros and Cons of Investing in Zinc Shares.
Investing in commodities may produce a return if commodity prices are going in the right direction; if they are going in the opposite direction, you might incur a lot of losses on your investment. There are notable benefits to investing in zinc-producing ASX companies that are ASX shares. There are wide industrial applications for zinc in the construction, transport, and appliance manufacturing industries. Large amounts of zinc are used primarily as anti-corrosion coatings on sheet steel, steel beams, vehicle panels, chain-link fencing, guard rails, and light posts. The large ASX zinc companies remain profitable even when the zinc price is in a price correction mode. When there are several advantages, ASX Zinc shares carry investing disadvantages as well. Investing in individual zinc-led stocks carries high risk due to their volatile nature. Investors should invest based on their own risk appetite. Long-term holdings alone might help someone reap the benefits of investing in ASX zinc stocks.
Top ASX Zinc Stocks to Watch: Biggest Companies in 2023
Australia accounts for over 20% of the world's zinc-lead resources and is the largest producer and exporter of these metals to the rest of the world. Zinc is considered the 4th most common metal in use after iron, aluminium, and copper as reported by the Geoscience Australia. Approximately 50% of zinc production is used to provide a protective coating on, or galvanizes steel. Here are some of the top ASX zinc stocks:
BHP Group Ltd. (ASX: BHP)
BHP Group Ltd. (ASX: BHP) has a market cap of $221.38 billion and a current price of $43.74 (as of August 24, 2023). It is a well-diversified natural resources company that produces commodities along with substantial interests in oil and gas. The company’s primary businesses are mineral exploration and production, along with exploration of petroleum, production, and refining. The company's assets, operations, and interests are segregated into copper, iron ore, nickel, metallurgical coal, and potash.
On July 20, 2023, the company reported that zinc production was one percent higher at 125 kt, reflecting higher throughput. Copper production of 120 to 140 kt and zinc production of between 85 and 105 kt have been expected for FY 2024.
AZURE Minerals Ltd. (ASX: AZS)
AZURE Minerals Ltd. (ASX: AZS), which has a market cap of $1.05 billion and a current market price of $2.70 (as of August 24, 2023), is an Australia-based mineral exploration company. After the worldwide coronavirus pandemic in 2020, the company transitioned back to Australia with the acquisition of a number of gold and base metal projects in Western Australia.
The company reported infill and extensional reverse circulation, and diamond core drilling continues to intersect notable lithium mineralization at the Andover project, situated in Western Australia.
Adriatic Metals Plc (ASX: ADT)
Adriatic Metals Plc (ASX: ADT) has a market cap of $912.50 million and a current market price of $3.84 (as of August 24, 2023). It is a precious and base metals explorer and developer that own the advanced Vares Silver Project in Bosnia and Herzegovina.
Faulting and folding at the western extent of the RNW have created a vertical strike-continuous domain of thickened high-grade mineralization, opening up new mining opportunities.
Rupice Northwest exploration drilling continues to deliver high-grade Ag-Zn-Pb-Au-Cu extensions to mineralization to the west of the July 2023 Rupice mineral resource estimates.
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Frequently Asked Questions (FAQ)
What are the best zinc stocks to buy?
The best ASX zinc stocks to buy are: OZ Minerals Limited (ASX: OZL); market cap: $9.51 billion, currently trading at $$28.19 as of August 24, 2023; and Sandfire Resources Limited (ASX: SFR); market cap: $2.92 billion, current market price: $6.37.
Where is Queensland zinc mined?
Australia's main zinc mines are at McArthur River in the Northern Territory and Hilton-George Fisher in Queensland. Dugald River is also being developed in north-west Queensland on one of the world’s highest-grade known zinc deposits.
Which is the world's second largest zinc producer?
Australia has been positioned as the third-largest behind China and Canada in global mine production and the second-largest after Canada in zinc exports as reported by Geoscience Australia. Australia exports zinc as a refined metal to a broad range of destinations in the Asia-Pacific area, extending from India to the USA but mainly to Indonesia, Hong Kong, Chinese Taipei, and Malaysia.
Which country are the major customers of Australian zinc?
The major customers for Australian zinc ores and concentrates are Japan and South Korea, and, to a lesser extent, Belgium, Germany, and the United Kingdom.
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