SHANGHAI, Dec 19 (SMM) – Recovering capacity at overseas zinc mines will extend the increase in global zinc concentrate production in 2020, and will be able to supplement China’s concentrate supply, which will remain in surplus next year, according to SMM senior zinc analyst Li Darius.
The foreign zinc concentrate market is likely to witness supply additions of 575,000 mt in 2019, and 300,000-400,000 mt in 2020, both in metal content basis, Li forecasted at the first China International Hot-Dip Galvanising Technology and Market Application Development Forum, which is organised by SMM in Tianjin on December 19.
Rising production overseas will likely buoy China’s imports of zinc concentrate above 3 million mt in physical content in 2019, according to Li.
The supply growth in 2019 is primarily contributed by Glencore, Hindustan Zinc, and Australian miners McArthur River, Century Tailings and Lady Loretta, Li said.
He noted that a slew of new and expanded zinc mining capacity is slated to commission at abroad in 2020, adding capacity by 640,000 mt.
Africa and Oceania account for majority of the increase in global zinc concentrate output in 2019, Li said.
Industry data showed that the world’s zinc concentrate production stood at 8.53 million mt in Zn content in the first eight months of 2019, 2% higher than the same period a year earlier. Among this, production in Africa rose 28% on the year to 350,000 mt, and output in Oceania climbed 38% to 940,000 mt.
China’s imports of zinc concentrate amounted to 2.26 million mt in physical content in January-September this year, up 2% from a year ago, according to SMM calculations based on customs data.
Disrupted shipment from China’s top supplier Australia amid flooding in February reduced domestic imports of Australian zinc concentrate by half in March and April. But the imports rebounded since May on the recovery of rail delivery.
Production growth of zinc concentrate in China remains at a slow pace, capped by environmental and safety issues, as well as profit margins at miners, Li told delegates at the Forum.
SMM estimates an increase of 200,000 mt in China’s zinc mining capacity in 2019. Capacity additions are likely above 100,000 mt in 2020, without considering any capacity reduction.
Meanwhile, China’s zinc concentrate supply will remain in surplus in 2020, the analyst said, adding that smelters only maintain a certain amount of stockpiles amid cash flow issues and sufficient availability in the market.
SMM data indicated that zinc concentrate inventories at Lianyungang port have recovered from low levels since the second half of 2018, and currently stay above 100,000 mt.
Chinese zinc smelters mostly hold raw material inventories able to meet production needs for around a month, SMM learned.
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