[Zn Price] Will Ore Shortage Speculations Push up Zinc Price Again in Second Half?

SHANGHAI, Jul. 15 (SMM) – Zinc market witnessed a sharp gain last year as speculations over the closures of world’s major mines would tighten ore supplies.  

Will this factor become a driving factor for zinc price again during the second half of 2015?

“This probably won’t happen again, as the closures of large mines will come later than expected,” said SMM’s zinc analyst.

The Century Zinc Mine will not shut down until 3Q this year, according to MMG's report, one quarter later than market estimate. Output of zinc concentrate at the mine is expected to reach 320,000-370,000 tonnes in 2015, and the processing of ore from Dugald River will also add the mine’s ore production by another 50,000 tonnes this year. 

In addition, Vedanta Resources said to postpone the closure of Lisheen mine to year-end of 2015 from earlier’s mid-2015. The closure of the mine, in fact, will not reduce its ore supply, due to expansion at Gamsberg mine and service life extension at Skorpion mine.    

According to the company’s financial report, output of lead and zinc concentrate was 209,000 tonnes in the fiscal year 2015, from Apr. 1, 2014 to Mar. 31, 2015, and the output during the fiscal year 2016 will be 220,000-230,000 tonnes.  

Hence, supply of imported ore is expected to be healthy during the third quarter of 2015, SMM estimates, adding that rising TCs for imported zinc concentrate this year also reflect no ore shortfalls.

In China’s zinc ore market, supply became tight in south China from this May, but such condition is expected to ease during the second half of 2015, SMM points out.

Growing production in Sichuan and production resumption by Mengzi Mining & Metallurgy Co. will help alleviate the shortages in south China.  

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