May Zinc Price Forecast: Usage Projected to Grow this Year

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Adobe Stock/ Björn Wylezich

Adobe Stock/ Björn Wylezich

The International Lead and Zinc Study Group recently released its latest findings, which revealed world usage of refined zinc metal is projected to grow 3.5% in 2016 due mostly to a 4.5% increase from demand in China.

The Far East nation’s demand is expected to grow due to continued investment in its infrastructure. In addition, Europe is expected to remain stable in 2016 after improving 3.2% in 2015 as far as zinc usage is concerned.

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Growth as high as 13.1% is expected in the Republic of Korea with increases also projected in India, Japan and the U.S.

As for supply? The ILZSG report states: “A sharp forecast fall in ex-China zinc mine production of 9.4% is due to a combination of mine closures and recently announced production cutbacks. Chinese output, which is reliant on production from a large number of small mines, is forecast to grow by 12.4%. Overall global zinc mine output is expected to fall by 1.4% to 13.27 million metric tons.”

Furthermore, Australia is expected to significantly reduce its production by 46% as a result of mine closures last year.

The ILZSG concluded: “Despite the fact that lower output is also expected in a number of other countries including Canada, India and Kazakhstan, current forecasts indicate that these reductions will be more than balanced by anticipated rises primarily in China, the Republic of Korea, Namibia and Norway. However, taking into account the predicted decrease in zinc mine supply it is possible that zinc metal production expectations in some countries may be subject to downward revisions later in the year.”

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