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Zinc, lead demand continue to outstrip output

18th July 2017

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – New analysis by the International Lead and Zinc Study Group (ILZSG) has found that demand for zinc grew by 1.14% during the first five months of 2017, with mine output rising 6.3% and refined metal output up 0.4%.

In its latest report published on Monday, the ILZSG said that preliminary data it had recently compiled pointed to a global refined zinc market deficit of 178 000 t in the period, while total reported inventories declined by 167 000 t over the same period.

Global zinc output between January and May rose 6.33% to 5.38-million tonnes, with May output the highest so far this year at 1.9-million tonnes. The study group attributed rising output to increases in Eritrea, India, Peru and Turkey, that more than balanced reductions in Australia and the US.

The ILZSG pointed out that a significant 54.8% rise in Indian refined zinc metal output was mainly offset by reductions in Canada, Japan, the Republic of Korea, Peru and Thailand, resulting in an overall global increase of only 0.4% to 5.59-million tonnes.

Following a sharp fall in 2016, US apparent demand for refined zinc metal increased by 19%. In China, apparent usage decreased by 2.8% and in Europe rose by 1.8%. On a global basis demand was 1.14% higher at 5.77-million tonnes during the five-month period.

The group noted that Chinese imports of zinc contained in concentrates amounted to 477 000 t, a rise of 27.9% compared with the same period of 2016. The country’s net imports of refined zinc metal decreased by 48.4% to 129 000 t.

The zinc price stood at $2 819.49/t on Monday, having gained 15% since its low of below $2 450/t early in June.

LEAD RISING
Provisional data reported to the ILZSG indicates that the world's refined lead metal demand exceeded supply by 91 000 t during the first five months of 2017. Over the same period, total reported stock levels increased by 23 000 t.

The increase in global lead mine production was 12.7% year-on-year to 2.15-million tonnes, mainly owing to higher output in China and India, which more than offset decreases in Australia and Peru.

World refined lead output rose 7.2% to 4.88-million tonnes, mainly on the back of increases in China, India, the Republic of Korea and the US.

US apparent demand for refined lead metal rose 23.3%, owing to a sharp rise in net imports. Chinese apparent usage rose by 13.7% and, in Europe, by a more modest 1.7%. Overall global demand rose by 10.3% to 4.97-million tonnes.

The ILZSG noted that Chinese imports of lead contained in lead concentrates decreased by 4.9% to total 272 000 t. Net imports of refined lead metal amounted to 41 000 t, compared with net exports of 12 000 t over the same period in 2016.

Lead prices have also recovered some 12.3% since early June to $2 302.07/t on Monday, having hit a low of below $2 050/t a month ago.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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