Photo by: Bloomberg
The global refined zinc market will see a surplus of 248 000 metric tons in 2023 compared with a previously forecast deficit of 45,000 tons due to slower than expected demand growth, the International Lead and Zinc Study Group (ILZSG) said on Monday.
Prices for zinc are down 16% so far this year following last year's slump in demand from China, the world's largest consumer.
The surplus for the metal, used to galvanise steel for the construction and auto sectors, will widen to 367 000 tons in 2024, the ILZSG added.
Global demand for refined zinc is expected to increase by 1.1% to 13.59-million tons in 2023 and by 2.5% to 13.93-million tons in 2024. In April, the group expected 2023 demand to rise to 13.80 million tonnes.
Usage in China will recover 3% this year as galvanised plate output increased by 12% in January-July after falling 12% in 2022.
"The production of passenger cars and home appliances has also risen over the same period, however investment in the real estate sector has remained depressed. In 2024, a growth of 1.2% in Chinese zinc demand is anticipated," ILZSG said.
Global refined zinc metal production is forecast to rise by 3.7% to 13.84-million tons in 2023, and by 3.3% to 14.30-million tons in 2024, mainly driven by an increase in China, the group said.
In the lead market, global supply of refined metal will exceed demand by 35 000 tons in 2023 and by 52 000 tons in 2024, the ILZSG said.
Refined lead supply is forecast to increase by 2.7% to 12.84-million tons in 2023 and by 2.3% to 13.14-million tons next year, while demand is seen increasing by 1.1% to 12.80-million tons this year and by 2.2% to 13.08-million tons in 2024.
Demand growth in China is expected to accelerate to 2.4% in 2024 from 1.9% this year, ILZSG added.