World Zinc Market Supply Deficit to Diminish in 2018

SEATTLE (Scrap Monster): The sixty-second International Lead and Zinc Study Group (ILZSG) session held in Lisbon, Portugal on 26-27, October has published detailed review of current market trends and global supply-demand situation for Zinc metal. In addition, the trade organization has forecast its outlook of the metal in 2017 and 2018.

According to ILZSG, the world refined zinc metal demand is predicted to grow marginally by 0.7% to total 13.93 million tonnes during the current year. However, the demand is expected to report relatively strong growth of 2.5% in 2018. The world demand for refined zinc metal is likely to total 14.28 million tonnes in 2018.

Apparent Usage

For 2017, ILZSG predicts 12.2% jump in apparent usage in the US. The European demand is forecast to increase slightly by 0.4%. The rise in demand in Belgium and the Russian Federation will be offset by demand decline in France and Germany. The Chinese apparent demand is expected to decline by 1.8% during the year.

The US apparent demand may increase marginally by 2% in 2018. The European demand will rise further by 2.8% to touch the highest levels since 2011. The Chinese demand is expected to rise by 3% during next year.

Mine production

The world zinc mine production in 2017 is forecast to touch 13 million tonnes, rising by nearly 1.8% from the previous year. It must be noted that the mine output had reported drastic decline in 2016. The rise in output during this year will be driven by notable jump in production by Eritrea, India and Peru.

In 2018, the global mine production is forecast to rise sharply by 6% to total 13.78 million tonnes. ILZSG expects higher production from Australia, South Africa, European countries, China, Cuba and the US.

Metal production

The global refined zinc metal output may witness marginal decline of 1.4% during this year, despite significant jump in Indian output. ILZSG forecasts the 2017 zinc metal production at 13.53 million tonnes. This is mainly on account of production declines in other producing nations including Canada, China, Peru, the Republic of Korea and Thailand.

Meantime, production rises in Australia, Belgium, Canada, China, Republic of Korea and Norway will lead to 3.9% jump in zinc metal output in 2018. The output during the year is likely to total 14.06 million tonnes.

Based on information provided by member countries, ILZSG forecasts a supply deficit for global zinc market in 2017. The global demand for refined zinc metal is likely to exceed supply by 398 kt. In 2018, the market deficit will reduce to 223 kt.