Global Refined Zinc and Lead metal to grow by 2% in 2017, predicts ILZSG

Published: May 05, 2017 10:12 (GMT+8)
The Standing Committee of the International Lead and Zinc Study Group (ILZSG) in its spring session held on 26th April, 2017 in Lisbon, Portugal reviewed the current outlook for trends in world supply

May 04, 2017 11:30:34 AM
SEATTLE (Scrap Monster): The Standing Committee of the International Lead and Zinc Study Group (ILZSG) in its spring session held on 26th April, 2017 in Lisbon, Portugal reviewed the current outlook for trends in world supply and demand for lead and zinc during 2017. According to the review, global demand for refined zinc and lead is expected to rise by over 2% each during the year.

Lead

According to ILZSG, the global demand for refined lead metal is forecast to total 11.39 million tonnes in 2017, marginally higher by 2.3% over the previous year. The demand growth will be mainly driven by Chinese demand, which is expected to grow by 4.3% over the previous year. The lead metal usage by Europe is forecast to remain flat. It must be noted that the European region had posted nearly 10% jump in usage during 2016. ILZSG predicts flat steady demand growth in Japan and the Republic of Korea. Both India and the US is expected to record demand growth of nearly 1.5% in 2017.

The lead mine production is expected to surge higher significantly by 4.3% over the previous year in 2017. The full year lead mine production is estimated at 4.92 million tonnes, mainly on the back of ramped-up production from China. The output by other major producing countries such as Canada, Greece, Kazakhstan, Mexico and India are also expected to post considerable growth in 2017. Specifically, higher output is expected from Hindustan Zinc’s Rajasthan operations.

The global refined lead metal production is anticipated to increase by 2.2% year-on-year to 11.39 million tonnes in 2017, on account of increased output by China and India. It must be noted that world refined lead metal output had increased by 2.8% in 2016. The output by Belgium and the US are likely to show significant improvement during the year. The recently commissioned lead-acid battery recycling plant in Nevada will also contribute to the lead output during the current year, stated ILZSG.

ILZSG anticipates close balance between refined lead metal supply and demand in 2017. Further, the reported inventory levels of refined lead are forecast to remain more or less similar to current total.

Zinc

The global demand for refined zinc metal is forecast to total 14.30 million tonnes in 2017, marginally higher by 2.6% over the previous year. The demand had witnessed rise of 3.1% in 2016.

The demand from the European region is likely to remain more or less stable with a modest rise of 0.7% in 2017. The rise in demand in Belgium, Italy and the Russian Federation will be partially offset by reduced demand from France. The apparent usage by the US will recover during the current year. China and India will see rise in refined zinc metal demand, whereas Thailand is likely to report fall in demand. The demand may remain stable in Japan and Korea.

Meantime, refined zinc mine production is forecast to surge higher by 6.7% to 13.70 million tonnes in 2017. The mine production had declined by 5.5% in 2016. The completion of maintenance works at Hindustan Zinc’s Rampura Agucha operation in India will lead the production recovery. ILZSG forecasts increased output from Peru’s Antamina mine and Finland’s Sotkamo operation. It also expects higher output from mines in China, Australia and Eritrea.

The refined zinc metal output will rise 2.6% to 14.08 million tonnes in 2017, mainly on the back of rise in output by China and India. Ongoing strike at Valleyfield refinery may badly impact Canadian production. Damages caused by floods may affect production from Cajamarquilla zinc plant in Peru. Similar decline in refined zinc metal production is anticipated from Thailand and Korea.

The global demand for refined zinc metal will exceed supply in 2017, despite sharp rise in zinc mine output. ILZSG forecasts the refined zinc metal to end in deficit of 226,000 tonnes.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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