LONDON (Scrap Register): Global market for refined zinc metal recorded a deficit of 286 kilo ton during last year, as per the latest figures released by the International Lead and Zinc Study Group.
Inventories held in LME, Shanghai Futures Exchange and Chinese State Reserve Bureau (SRB) warehouses together with those reported by producers, consumers and merchants decreased by 82kt to total 1384kt.
A substantial 43,1% decline in Australian zinc mine output was primarily a consequence of the closure of MMG’s Century mine at the end of 2015 and a reduction in output at a number of Glencore’s mines. Production was also significantly lower in Ireland, due to the shutdown of Vedanta’s Lisheen operation, India and Peru.
However, these reductions were offset by increases in Bolivia, Canada, China and the commissioning of new production in Eritrea. As a consequence overall world production was at a similar level to that in 2015.
World output of refined zinc metal was also close to the total recorded in 2015 with increases in China and the Republic of Korea being balanced by a significant fall in India and reductions in Argentina, Australia, Belgium, Finland, France, Japan, Mexico, Poland and the United States.
A rise in global usage of refined zinc metal of 3.6% was primarily driven by sharp increases in apparent demand in China and India. A fall in apparent usage in the United States of 12.4% was possibly affected by drawdowns in unreported stock levels. European demand was 0.3% lower.
Chinese imports of zinc contained in zinc concentrates in 2016 amounted to 817kt a decrease of 40.5% compared to 2015. Net imports of refined zinc metal decreased by 9.8% to total 403kt.
Cash Settlement and Forward Three Month Prices on the LME averaged US$2095 and US$2102 respectively during 2016, 8.6% and 8.4% higher than during 2015. The highest Cash Settlement Price of US$2907 was recorded on 28 November and the lowest of US$1453 on 12 January.