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Lead, zinc and copper markets all in deficit during first quarter of 2019

12th July 2019

By: Nadine James

Features Deputy Editor

     

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Provisional data reported to the International Lead and Zinc Study Group (ILZSG) indicate that global refined lead metal demand exceeded supply by 39 000 t during the first four months of 2019, the organisation stated in a press release last month. Over the same period total reported stock levels decreased by 21 000 t.

Increased production in India, Peru and Sweden, resulted in a 0.7% increase in global lead mine production, partially offset by reductions in China.

A 2.3% increase in global lead metal production was mainly a result of higher output in China, India and the Republic of Korea, with production in Europe, Japan and the US remaining stable.

Refined global lead metal consumption rose by 2.3%, influenced by rises in China and India. In Europe, Japan, the Republic of Korea and the US, consumption was lower compared to the first four months of 2018.

The ILZSG also noted that the global market for refined zinc metal was in deficit by 97 000 t over the first four months of 2019 with total reported inventories increasing by 10 000 t.

Global zinc mine production rose by 1.5%, owing to a substantial increase in Australia, and rises in Europe, Namibia and South Africa. Output was lower in China, India, Mexico, Peru and the US.

Higher refined zinc metal production in Mexico and Peru was more than offset by decreases in China, India and the Russian Federation, resulting in an overall global reduction of 2.3%.

A 1.3% fall in global consumption of refined zinc metal was mainly influenced by a reduction in apparent demand in China. In Europe, India, Japan and the US consumption remained at a similar level to that of the same period of 2018.

Meanwhile, the International Copper Study Group (ISCG) noted that preliminary data indicates that global mine production declined by about 1.3% in the first quarter of 2019, with concentrate production declining by about 1% and solvent extraction-electrowinning by 3.5%.

The ICSG noted that while several countries experienced production increases, these were largely offset by declines in two major producer countries, namely Chile and Indonesia.

Production in Chile, the world’s largest copper producing country, declined by 5% mainly as a result of lower copper head grades, while Indonesian concentrate production declined by 52% primarily as a consequence of the transition of the country’s major two mines to different ore zones leading to temporarily reduced output levels.

After aggregated growth of 11% in 2018, production in the Democratic Republic of Congo and Zambia increased by only 1.7% in the first quarter of 2019 as reduced production at some mines partially offset ramped-up output at other operations.

The ICSG added that production in Peru, Australia, China and Mongolia increased owing to improved grades and recovery from constrained output in 2018.

“On a regional basis, mine production is estimated to have increased by around 2% in Africa, 2% in North America and 5% in Oceania but declined by about 3% in Asia, 3% in Latin America and 3.5% in Europe.

Preliminary data indicates that global refined production declined by around 1.1% with primary production (electrolytic and electrowinning) declining by around 1.5% and secondary production (from scrap) increasing by 0.7%.

The decline in global refined production was mainly attributed to a 32% decline in Chilean electrolytic refined output as a result of temporary smelter shutdowns to implement upgrades to comply with new environmental regulations, a decline of 45% in India’s production negatively impacted by the shutdown of Vedanta’s Tuticorin smelter in April 2018, and a 28% decrease in Zambian refined output resulting from power supply interruptions, smelter outages and the January 1, 2019 introduction of a 5% custom duty on copper concentrate imports.

“However overall decline was partially offset by growth in China [owing] to the continued expansion of Chinese smelter/refinery capacity. Other countries recovering from production constraints in 2018, such as Australia, Brazil and Poland also contributed to growth.”

The ICSG noted that, on a regional basis, refined output is estimated to have increased by 2.5% in Asia and by 24% in Oceania, while declining 8% in Africa, 12% in the Americas and remaining flat in Europe.

Global refined consumption increased by about 0.8% in the first quarter of 2019, with Chinese apparent consumption increasing by around 4%.

Among other major copper users, demand increased in India but declined in the EU and the US, remaining flat in Japan.

The global refined copper balance in the first quarter of 2019 demonstrates a deficit of about 30 000 t.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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