In a report released last week, the International Lead and Zinc Study Group (ILZSG) states that it expects only marginal increases in demand for lead and zinc in 2019.
The ILZSG forecasts that global lead demand will rise by 0.7% to 11.79-million tonnes in 2019, compared with the 11.71-million-tonne full-year estimate for 2018. Meanwhile, zinc demand is expected to increase by 1.1% to 13.88-million tonnes in 2019, with total 2018 demand expected to reach 13.74-million tonnes.
“In 2018, Chinese apparent use is expected to fall by 0.6%, influenced by . . . increased penetration by lithium- ion batteries and slower growth in the automotive sector . . . a further 1.3% fall in apparent usage in China is anticipated in 2019,” the report states.
Further, it notes that European usage is forecast to increase by 1.4% in 2018 and 1.8% in 2019, while, in the US, a reduction of 0.6% in 2018 followed by a 2.5% rise in 2019 is anticipated.
ILZSG expects global lead mine supply to fall by 0.4% to 4.58-million tonnes in 2018, and then to increase by 4.1% to 4.77-million tonnes in 2019.
The group attributes the dip in supply in 2018 to reduced lead output in Australia, China, Kazakhstan and the US, which will offset increased output in Cuba and India. Further, while there are new mining projects coming on stream, including Coeur Mining’s Silvertip mine, in Canada, and Vedanta’s Gamsberg operation, in South Africa, they are not scheduled to be commissioned until late 2018 and will therefore have a greater impact on 2019 output.
“The forecast rise in global lead concentrates supply in 2019 will be driven mainly by higher production in Argentina, Australia, Canada, China, India, Kazakhstan and South Africa. In Europe, after increasing by 2.8% in 2018, lead mine output is expected to grow by a further 3.7%.”
Production in 2019 will benefit from higher output in Europe and the US, where output is forecast to grow by 3.9% and 2.4% respectively. Refined lead supply in Australia, China, India and the Republic of Korea is also expected to increase.The
ILZSG anticipates that global output will be constrained by tightness in the availability of lead concentrates and that demand for refined lead metal will exceed supply by about 123 000 t in 2018.
“This represents a change to the previous prediction of a 17 000 t deficit.” The group says the revision is due to lower-than-expected lead metal output in Australia and China. By 2019, a surplus of about 50 000 t is expected.
Meanwhile, a slowdown in refined zinc metal production in China will not be completely offset by increases in net imports, and, thus, apparent zinc demand is expected to fall by 0.5% in 2018. “Activity in the galvanising industry, notably regarding smaller-sized plants, has been adversely affected by closures or production cutbacks [caused by] the enforcement of environmental rules. In 2019, Chinese demand is expected to rise by a modest 0.8%.”
Apparent uge in the US is forecast to increase by 2.1% this year, with a 0.9% rise anticipated for 2019.
Apparent use is anticipated to rise in India and to remain stable in both Japan and the Republic of Korea in 2018 and 2019.
World zinc mine production is forecast to increase by 2% to 13.03-million tonnes in 2018 and by a further 6.4% to 13.87-million tonnes in 2019.
A notable increase in Australia’s mine production in 2018 will be partially offset by a 2.5% fall in Chinese zinc concentrates supply. Output is also expected to be lower in Canada, India and Mexico but to rise in Cuba, Kazakhstan, Peru, South Africa, Turkey and the US.
“The imminent commissioning of the Gamsberg operation, in South Africa, will have a significant impact on global production in 2019. Output is also anticipated to be higher in Canada, India, Kazakhstan and Mexico, benefiting from a number of new projects and expansions in existing capacity that are expected to be completed,” the ILZSG notes.