Zinc, Lead Post Global Supply Deficits in 1H 2018

Björn Wylezich/Adobe Stock

According to data released Monday by the International Lead and Zinc Study Group (ILZSG), both lead and zinc were in deficit through the first six months of the year.
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According to the ILZSG report, Chinese data for the months of April, May and June are still unavailable; as such, revisions may be made as that data becomes available.

Global Lead Market

Global lead demand outpaced supply by 39 kt in the first half of the year, according to the report. Meanwhile, reported lead stock levels fell by 41 kt.
Global lead mine production fell 4.2% from the first half of 2017, down to 2,258 kt from 2,386 kt, which was “primarily due to lower output in Australia, Kazakhstan, Peru and the United States that more than offset increases in Europe, Cuba and Morocco,” according to ILZSG. Mine production in June hit 358.3 kt, down 3.4% from 371.0 kt in May.
Lead usage ticked up just 0.5% for the six-month period, aided by usage increases in the U.S. and Germany, according to the report.

Global Zinc Market

As for zinc, the global refined zinc market finished the first half with a 17-kt deficit, according to ILZSG. In that span, reported inventories increased by 77 kt.
Mine production in the first half dropped 2.4% year over year, with reductions in China, India and Australia offsetting a 5.6% rise in European zinc mine production.
Global zinc usage dropped 0.6% year over year, a trend led by apparent demand decreases in South Africa, Taiwan and the U.S., according to the report.
The LME lead price fell 8.7% in the last month, closing at $1,975/mt as of Friday, Aug. 17.
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LME zinc, meanwhile, traded mostly sideways for much of the past month before dropping 12.1% since Aug. 9, closing at $2,359/mt as of Friday, Aug. 17.

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