Zinc sector report lowers demand forecast for 2016

BEIJING (Scrap Monster): In its latest Zinc sector forecast report, the Chinese state-owned metals consultancy Beijing Antaike has lowered the zinc concentrate demand forecast for year 2016. The revised forecast is on the back of country’s struggling galvanized steel sector, Antaike noted.

According to the zinc sector report released Thursday, the consultancy noted that the era of high-speed steel output growth has come to an end. The weak market conditions during the initial two-month period in 2016 have resulted in low domestic galvanized steel operation rates. Based on prevailing market conditions, the consultancy has downgraded the Chinese zinc concentrate demand forecast to 5.69 million metric tonnes, as compared with the earlier forecast of 6.33 million metric tonnes. As per new forecast, the yearly demand in 2016 is expected to decline by over 1% when compared with the previous year. The country’s zinc concentrate demand had totaled 5.755 million metric tonnes in 2015.

Trades of imported zinc concentrate remained weak, as domestic prices quoted lower levels when compared with imported concentrate prices. The treatment charges for imported zinc concentrate dropped from $130-$140 per mt in January to $120-$130 per mt in February this year. Market sources indicate that TC offers had dropped to even $115 per mt during the month.

The Chinese imports of zinc concentrate are expected to post 20% decline over the previous year to total 1.2 million mt in 2016. The global supply is expected to shrink on account of major mine closures in Australia and Ireland. Also, the country’s zinc concentrate output is expected to grow by 3.5% to 4.4 million mt. Antaike had predicted China’s refined zinc demand to climb higher by 3% in 2016 to 6.4 million mt.