If you consider where zinc was in 1989, which is where it is now, and compare the long-term trend, zinc is neither expensive nor cheap and is probably priced where it should be.
However, as we saw from 2005 to 2007, prices sky-rocketed based on the perceived intrinsic value of zinc at the time and what it would be in the future. i.e. they thought we would run out, and because of mines closing etc in 2013.
The past then, tends to be somewhat irrelevant, except as academic footnotes to depict where we have been...
And well, here we are again on the precipice of a new zinc boom, except that 2013 is next year and prices have hardly moved from the long-term trend nor the highs of 1989. I'd be happy if prices moved to just $3000 a tonne, KZL would then have companies knocking it's door down to develop Admiral Bay but depending on the speed of the supply side response, prices could move much much higher.
The risk of course, is always 'off market' or 'black market zinc', which has a funny way of appearing half-way during bull runs, so as we get there you have to be smart enough to know when to check out and wait for the next run. This will be the 4th zinc boon in 20 years or so. The numbers though are much precarious and duly supportive of a more sustained and longer run that we had before.
KZL Price at posting:
18.0¢ Sentiment: Buy Disclosure: Held
