Refined Zinc market in 2016 records 286,000 tons deficit

ALBANY (Scrap Monster): The latest statistics published by the International Zinc and Zinc Study Group (ILZSG) indicates that reported stock of Zinc metal declined by 82kt during all of 2016. The inventories reported by the London Metal Exchange (LME), Shanghai Future Exchange (SHFE), Chinese State Reserve Bureau (SRB) warehouses, producers and consumers totaled 1,384kt, lower by nearly 5.6% when compared with the reported stocks of 1,466kt at the end of year 2015. The LME stocks totaled 428kt, whereas stocks held by SHFE and SRB totaled 153kt and 254kt respectively. The reported inventories of the metal with consumers and producers totaled 404kt and 132kt respectively.

The overall global zinc mine production remained more or less flat in 2016 when compared with the previous year. The zinc mine output by world countries excluding China dropped sharply by 10% year-on-year to total 7.680 million tons. The world zinc mine output during 2016 totaled 13.225 million tons as against 13.202 million tons during 2015.

The zinc mine production by Australia plunged by 43% over the previous year, mainly on account of closure of Century Mines by end 2015 and the reported drop in output at Glencore’s various mines. The country’s production totaled 898,000 tons in 2016, as compared with the output of 1.578 million tons during 2015. The shutdown of operations at Lisheen mines resulted in significantly lower output by Ireland during the year. The production in India and Peru registered year-on-year decline of 17% and 6% respectively. The other countries to report decreased output in 2016 were Mexico (-0.8%), Kazakhstan (-1.0%) and the US (-2.3%). The drop in mine output in these countries was balanced by increased output by other countries including Bolivia, China and Canada. The Chinese output jumped higher by 18.8% year-on-year to 5.545 million tons. The zinc mine output by Canada and Europe increased by 8.0% and 0.8% respectively.

The 2016 refined zinc metal production totaled 13.663 million tons, almost flat when compared with the 13.651 million tons output during all of 2015. The refined zinc metal production reported significant decline in India and marginal decline in Argentina, Australia, Belgium, Finland, France, Japan, Mexico, Poland and the United States. . The refined output by world countries excluding China reported year-on-year decline of 5.1%.

Europe’s production was down marginally by 2.8% from 2.472 million tons in 2015 to 2.404 million tons in 2016. The output by India registered sharp decline of 26%, dropping from 838kt to 620kt over the year. The Australian zinc mine output reported year-on-year decline of 5.9%. Japan too reported 5.9% decline in refined zinc metal output during the year. The country’s production totaled 533kt in 2016.

The Republic of Korea reported biggest jump in output. The output by the country surged to 1.014 million tons, rising by 8.5%. China too reported 7.1% increase over the year. The production of refined zinc metal by China totaled 6.274 million tons. An 1.6% jump in production was reported by Peru during the year. The other countries to report increased refined production during 2016 were Canada (+0.4%) and Kazakhstan (+0.4%).

The world refined metal usage reported modest rise of 3.6%. The usage by world countries excluding China was down marginally by 0.6%. The usage totaled 13.949 million tons in 2016. The decline in usage by the US , Europe and Japan was offset by increased usage by China, India and the Republic of Korea. The change in zinc metal usage when compared with 2015 is as follows: Europe (2.405 million tons, -0.3%), the US (816kt, -12.4%), China (6.724 million tons, +8.6%), India (723kt, +14.4%), Japan (472kt, -1.4%) and Republic of Korea (618kt, +5.4%).