ILZSG: Global Lead, Zinc Post Supply Deficits in 2018

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The International Lead and Zinc Study Group (ILZSG) recently released data for 2018 showing lead and zinc posted supply deficits last year.


Zinc supply fell short of demand by 384 kt in 2018, according to the ILZSG.
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Zinc mine output “increased significantly” in Australia in 2018, while output jumped 5.9% in Europe, paced by higher output in Finland, Greece, Macedonia and the Russian Federation that offset declines in Poland and Sweden. Production was also higher in Bolivia, Brazil, Cuba, Eritrea, Kazakhstan, South Africa, Turkey and the United States, according to the report.
Global production increased by 2% compared to 2017.
Meanwhile, refined zinc metal output was flat in 2018 compared to 2017, while zinc usage fell 0.3% year over year.
China’s imports of zinc contained in zinc concentrates increased 20.1% year over year last year, while its imports of refined zinc metal surged 4.7% year over year to 693 kt.
China led the way in zinc mine production with 4.4 million tons out of a global total of 12.9 million tons (up from 12.6 million tons in 2017). Peru produced 1.5 million tons, while Australia and Europe produced 1.1 million tons apiece.
As for prices, LME zinc ranged between a low of $2,287 per ton on Sept. 17 and a high of $3,618 per ton on Feb. 16. Average cash settlement prices rose 0.9% year over year to $2,922 per ton.

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LME zinc price in 2018. Source: LME


Similarly, lead also posted a supply deficit in 2018.
Demand for refined lead metal exceeded supply by 98 kt in 2018, according to the ILZSG.
Lead mine output fell 3.4% year in year in 2018, up from the 3.2% year-over-year drop the previous year. Production fell in Kazakhstan, Peru, Mexico and the U.S., but rose in Europe, Australia, Cuba, India and Turkey.
Refined lead metal usage rose 0.2% year over year last year, with a notable year-over-year increase of 8.3% in India. China’s usage jumped 0.8% year over year.
Speaking of China, its 2018 imports of refined lead metal rose 56.4% year over year. Imports of lead contained in lead concentrates fell 1.3%.
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China led the way in mine production with 2.1 million tons in 2018 out of a global total of 4.7 million tons. Australia produced 488,000 tons and Europe produced 447,000 tons.

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LME lead price in 2018. Source: LME

The LME lead cash settlement price traded within a band of $1,867 on Oct. 31 and $3,021 on May 14. The cash settlement price averaged $2,245 per ton in 2018, down 3.1% from the previous year.

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