Global Lead, Zinc Demand Forecast to Fall in 2019

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Amid a weakening demand picture for a number of metals, global lead and zinc demand is forecast to decline this year, according to the International Lead and Zinc Study Group (ILZSG).
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Zinc Demand Forecast to Fall in 2019, Bounce Back in 2020

According to the latest ILZSG report, global zinc demand is forecast to fall 0.1% this year to 13.67 million tons and rise by 0.9% in 2020 to 13.80 million tons.
Chinese demand is expected to bounce back after sliding for the past two years. China’s zinc demand is forecast to rise 0.6% in 2019.
“Despite a steep fall in automobile production, output in the galvanising sector increased during first seven months of 2019 compared to the same period of 2018, propelled by rises in property construction and investment in public infrastructure,” the ILZSG report stated.
Chinese demand is forecast to rise 1.2% in 2020.
Meanwhile, European demand is expected to fall 3.7% this year, on the back of declines in Germany and the U.K. The latter’s decline comes as a result of the liquidation of British Steel earlier this year; currently, the U.K.’s Official Receiver is seeking a buyer to take over the ailing firm. Talks with Ataer Holding, an arm of the Turkish military pension fund OYAK, failed to materialize a deal during a 10-week exclusivity period.
In 2020, however, European zinc usage is forecast to rise by 0.5%.
Elsewhere, demand is forecast to fall in India and Japan, with a 2020 recovery forecast for the former and a further decline for the latter.
In terms of supply, zinc mine production is forecast to rise 2% this year and by 4.7% in 2020.
“A significant rise in Australian output this year will mainly be a consequence of the commissioning of the Woodlawn tailings project in May and increased contributions from MMG’s Dugald River mine, Glencore’s Lady Loretta mine, and the tailings projects operated by New Century Resources and Hellyer that were commissioned in 2018,” the ILZSG report states.

Lead Demand Forecast to Fall 0.5%

As for lead, global demand is forecast to fall by 0.5% this year and rise by 0.8% in 2020. Lead usage is forecast to fall 1.1% in China this year; a usage decline is also forecast for both Europe and the U.S.
Lead mine supply, meanwhile, is forecast to increase 1.7% and 3.9% in 2019 and 2020, respectively.
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“The completion of expansions at Hindustan Zinc’s mines in India, combined with substantially higher Australian production, will be major influences on the forecast increase in 2019 output,” the report stated. “Rises are also expected in Mexico, Poland and South Africa. In Bolivia, Kazakhstan and the United States, production is forecast to be lower compared to 2018.”

Lead, Zinc Prices on the Rise

The LME three-month lead price is up 6.28% over the last month, rising to $2,207/mt early this week, according to MetalMiner IndX data.
Meanwhile, LME three-month zinc has surged 10.4% over the last month, up to $2,537/mt.

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