Refined Zinc Market Deficit Expanded in H1 2017

SPOKANE (Scrap Monster): The latest supply and demand statistics published by the Lisbon, Portugal-based International Lead and Zinc Study Group (ILZSG) indicates that global refined zinc market deficit widened further during the first half-yearly period in 2017.

According to preliminary data compiled by ILZSG, the global zinc market ended in a deficit of nearly 203,000 tonnes during January to June this year. Going by the current trends, the world zinc market is estimated to post a full-year deficit of 412,000 tons, said analysts. The total reported zinc inventories have declined by 212,000 tonnes during the above-mentioned period. The stocks at the end of June this year stood at 1.16 million tons, ILZSG noted.

During the six-month period, global zinc mine output reported sharp growth, increasing by 5.4% when compared with the first half of the previous year. The mine production from major producing nations including Eritrea, India and Peru reported increases. However, the rise in output from these countries was partially offset by declines in Australia and the US.

The refined zinc metal production during the initial six months of 2017 totaled 6.744 million tonnes, marginally higher by 0.5% when compared with the 6.708 million tonnes output during corresponding half-yearly period from January to June in 2016. The refined zinc metal output from India rose significantly over the previous year. The other countries to report surge in zinc metal output were Brazil and France. On the other hand, refined output reported sharp declines in other producing countries including Canada, the Republic of Korea, Peru and Thailand.

The global demand for refined zinc metal rose marginally by 0.6% to 6.947 million tonnes during January to June this year, as compared with 6.905 million tonnes during the same period last year. The apparent zinc metal usage by China reported marginal decline of 2.1% during the first half of 2017. However, the drop in usage was offset by strong apparent usage by the US and Taiwan.

Interestingly, Chinese net imports of zinc contained in concentrates increased sharply by 33.9% during H1 2017 in comparison with the corresponding period in 2016. The country’s imports of zinc contained in zinc concentrates totaled 549,000 tonnes. The Chinese net imports of refined zinc metal tumbled by nearly 40% to 169,000 tonnes.

The ILZSG preliminary data indicates that global zinc mine output totaled 1.154 million tonnes during the month of June alone. The global refined zinc metal production totaled 1.163 million tonnes, whereas global zinc demand totaled 1.188 million tonnes during the month.

Meantime, zinc prices continued its rally. Last week, the price of Zinc had hit the highest level in past one decade. Incidentally, zinc prices have gained by nearly 36% since the beginning of this year.