Thing is Muzza taking into accout cancelled warrants they alrady are in the "6"s,in fact well in at 65Kt.Your views are well founded on the basis of the LME numbers which ultimately tell the truth of the matter as far as the baseline reality is concerned and with Cu stocks dropping as well it makes for some interesting times with the complex.
The hard one to pick up is just what those sneaky Chinese are up to as little we hear about China is reality.Much is unreported in that country even though the industry continues to rationalise and become more accountable.This wont happen in the blink of an eye so look to more surprises,not necessarily on the good side.
This being said the overall picture is continuing to shape that demand for the metals is very strong whatever the motivation.
I also like to take into account a much larger baseline indicator relative to the base metals,that being Iron ore/steel production.If iron ore demand in China is anything to go by this base metals rally should be sustained espc by zinc as its like a puppy dog in relation to steel demand being so heavily tied to it in terms of galvanising.
Much has been talked about in terms of the Chinese lowering zinc levels in some of their galvanised products but with them starting to push more strongly into the export market via their greater manufacturing capacity they will have to maintain standards(galvanising thickness) and hence zinc consumption.This has been shown by the rather massive increase in concentrate imports over the last year.
Whats that old cliche "you can run,but you cant hide".
So combine the massive increases in iron ore imports as well as zinc concentrate imports,even if you allow for the zinc stockpile increase,the baseline Chinese domestic demand numbers must be pretty impressive.
With any kind of luck we will see good times for this much neglected base metal in the ensuing few years which will give both the big and little zincers the opportunity to get some very promising projects into production.
Hopefully the little guys can ramp up to production a bit quicker that some of the bigger projects;-)
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