1. The International Lead and Zinc Study Group held its Sixty-third Session in Lisbon, Portugal on 4-5 October 2018.
2. The Session included a meeting of the Study Group’s Statistical and Forecasting Committee to review the current levels of world supply and demand for lead and zinc and the outlook for 2019. The Standing, Mine and Smelter Projects, and Economic and Environment Committees and Industry Advisory Panel also met. In each of the Committees a number of speakers made presentations containing valuable information about current trends and issues in the global lead and zinc sectors.
Zinc Outlook for 2018 and 2019
13. World demand for refined zinc metal is forecast to increase by 0.4% to 13.74 million tonnes in 2018 and then by 1.1% to 13.88 million tonnes in 2019.
14. In China, the latest official reported figures indicate that a slowdown in refined zinc metal production will not be fully compensated for by an increase in net imports and therefore apparent demand is expected to fall by 0.5% in 2018. Activity in the galvanizing industry, notably regarding smaller-sized plants, has been adversely affected by closures or production cutbacks due to the enforcement of environmental rules. In 2019, Chinese demand is expected to rise by a modest 0.8%.
15. Apparent usage in the United States is forecast to increase by 2.1% this year with a 0.9% rise anticipated for 2019. European demand is predicted to grow by 1.6% in 2018 with rises in Belgium, France, Italy and Norway being partially offset by a reduction in Germany. A rise of 1% is expected in Europe in 2019.
16. Elsewhere, apparent usage is anticipated to rise in India and to remain stable both in Japan and the Republic of Korea in 2018 and 2019.
17. World zinc mine production is forecast to increase by 2% to 13.03 million tonnes in 2018 and by a further 6.4% to 13.87 million tonnes in 2019.
18. A rise in Australia this year will be influenced by an increased contribution from MMG’s Dugald River mine which opened in late 2017 and the commissioning of the New Century Resource’s and Hellyer tailings projects. In 2019, a further significant expansion at New Century Resources’ 264kt per year capacity operation is forecast. In addition, Heron Resources’ new Woodland mine is scheduled to open during the first quarter.
19. The notable increase in Australia’s mine production in 2018 will be partially offset by a 2.5% fall in Chinese zinc concentrates supply. Output is also expected to be lower in Canada, India and Mexico but to rise in Cuba, Kazakhstan, Peru, South Africa, Turkey, and the United States.
20. The imminent commissioning of Vedanta’s Gamsberg operation in South Africa will have a significant impact in global production in 2019. Output is also anticipated to be higher in Canada, India, Kazakhstan and Mexico, benefiting from a number of new projects and expansions in existing capacity that are expected to be completed. In China, production is forecast to rise by 2% in 2019 and in Europe by 5.4%, primarily as a result of higher
production in Finland and Portugal, where an expansion at Lundin’s Neves Corvo mine is expected to be completed during the second half of the year.
21. Global refined zinc metal production in 2018 is forecast to increase by 1.4% to 13.42 million tonnes. A predicted increase in world output of 3% to 13.81 million tonnes in 2019 will primarily be a consequence of an anticipated upturn in production in China and India.
22. Production in Europe is forecast to increase by 4.1% in 2018, influenced by rises in Belgium, Finland, Italy and Norway, and by a further 2.7% in 2019. Output in Australia and Canada is also anticipated to increase in both 2018 and 2019.
23. In the United States, output is forecast to decrease by 2.3% in 2018, with a recovery expected the following year. After remaining unchanged in 2018 production in Japan is forecast to rise by 5.5% in 2019.
World Refined Zinc Metal Balance
24. With regard to the global refined zinc metal market balance, in 2018 the Group anticipates that global demand for refined zinc metal will exceed supply by 322kt resulting in a further draw down of both reported and unreported stocks. In 2019, the market is expected to remain in deficit with the extent of the shortage forecast at 72kt.
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