The first quarter of 2018 (Q1) saw marginal increases in the demand for and supply of both zinc and lead metal, according to a report compiled by the International Lead and Zinc Study Group (ILZSG).

In the report, released last week, the organisation noted that demand for refined zinc metal increased by 0.4% year-on-year, primarily because of increased demand from China and India, which was enough to offset reduced demand from Europe, Japan, Taiwan and the US.

The ILZSG added that the global market for refined zinc metal was in surplus by 25 000 t during Q1, with total reported inventories rising by 118 000 t. Global mine production remained stable, largely as a result of increased production in Australia, Turkey and the US being offset by reductions in Canada, China and India. Global refined zinc metal production increased by 1.7% year-on-year.

Meanwhile, global lead mine production increased by 8.9%, compared with the first quarter of 2017, on the back of increased output from China, Morocco and Turkey.

Global refined lead metal production increased by 3.4%, mainly influenced by a reported 4.6% rise in China. Production was also higher in Australia and the US.

Despite this, global refined lead demand exceeded supply by 37 000 t during Q1, with total reported stock levels having declined by 26 000 t.

A 4.0% increase in the global use of refined lead metal was primarily a consequence of rises in Chinese and US demand of 7.1% and 4.6% respectively. Consumption in Europe increased by 1.0%.

Outlook 2018

The ILZSG expects global demand for refined zinc metal to comfortably exceed supply in 2018, with the extent of the deficit forecast at 263 000 t. It expects demand to increase by 2% year-on-year, as consumption in Europe and the US is expected to increase by 2.1%, while Chinese demand recovers to 2.2%, having declined by 0.8% in 2017.

The deficit is expected to occur despite global zinc mine production being forecast to rise by 5.1% to 13.62-million tonnes in 2018. This will be driven mainly by expected production increases in China and Peru, about 2.3% and 3.9% respectively.

In Australia, additional tonnage should be generated in 2018, mainly as a consequence of the opening of the Dugald River mine and the expected commissioning of New Century Resources’ 262 000 t/y tailings project in Queensland.

The opening of Vedanta’s Gamsberg mine during the second half of 2018 would result in an increase in South African production. Increases were also forecast in Canada, Cuba, Greece, Namibia and the US, noted the ILZSG.

The organisation expects that global demand for refined lead metal will exceed supply by 17 000 t in 2018, with global demand rising by 2.7% to 11.90-million tonnes, owing to increased consumption in China and the US, which are forecast to grow by 3.4% and 3.1% respectively. Consumption in Europe is expected to grow by 2.1%, influenced by a 4.5% rise in Italy.