Zinc Wrap Aug 7: Nexa Falls, Buenaventura Jumps
Zinc proxies diverged on Friday, August 7: Nexa Resources slipped 1.40% to US$14.10 while Buenaventura surged 4.88% to US$34.15. Silver-byproduct flows and Peru The post Zinc Wrap Aug 7: Nexa Falls, Buenaventura Jumps appeared first on The Rio Times .
On August 7, Latin America's two primary zinc tracking stocks exhibited contrasting performance trends. Nexa Resources, a pure-play zinc miner with operations in Peru and Brazil, experienced a decline of 1.40% to US$14.10, while Peruvian precious metals miner Buenaventura rose 4.88% to US$34.15. The divergent movements were primarily driven by factors unrelated to slab zinc itself.
Nexa's share price suffered due to a recent dip in European construction purchasing managers indices, which traders interpreted as a potential hindrance to galvanised-steel orders. Conversely, Buenaventura capitalized on a surge in gold inflows, propelling the company's stock price upwards as investors targeted the US$4,500 level promoted by UBS and ETF observers.
The company's zinc production, though significant, is influenced predominantly by its silver and gold activities. Regional currency fluctuations added further context to the situation. The Mexican peso strengthened to 17.12 per dollar, the Peruvian sol slightly weakened to 3.38, and the Bolivian boliviano surged by 1.55% to 11.78.
Among these, the boliviano's 1.55% gain warrants attention, as it directly impacts the operating margins of exporters who incur costs in La Paz and sell concentrate in US dollars. By the close of trading, Nexa was trading below its 50-day moving average, whereas Buenaventura had surpassed a two-month high. Trading volumes for both stocks were approximately 15% higher than their 20-day averages, suggesting that the market's reactions were not due to low liquidity.
The takeaway from Friday's events is clear: investors allocated funds to Buenaventura for its precious metals exposure and to Nexa for its industrial demand, with the latter's industrial trade proving less favored on that day. On a separate note, Buenaventura's impressive 4.88% surge was attributed to a precious metals rally rather than zinc-related factors. Nexa's 1.40% drop indicated genuine weakness stemming from the galvanised-steel supply chain.
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