ILZSG: Global lead, zinc supplies post surpluses through first half of 2020

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The global lead and zinc markets posted supply surpluses during the first half of the year, the International Lead and Zinc Study Group (ILZSG) reported late last week.

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Lead supply exceeds demand by 78kt

The global lead market posted a surplus of 78 kt during the first six months of the year, according to the ILZSG.

Meanwhile, lead stocks declined by 20 kt during the period.

Lead mine production fell 5.5% during the period. Production fell in Bolivia, Canada, India, Kazakhstan, Peru and South Africa.

Furthermore, global lead metal production dropped 4.3%. Lead metal output fell in China, the U.S., Europe and India, according to the ILZSG.

Refined lead metal usage fell 5.9% year over year.

Lastly, despite an uptick in imports of a variety of metals in July — namely, copper and aluminum — China’s imports of lead contained in lead concentrates dropped 24.5% during the period.

Zinc surplus totals 205 kt

As for zinc, the global zinc market posted an H1 2020 surplus of 205 kt.

Zinc mine production fell 7.5% during the period. Mine output fell in Bolivia, China, Mexico, Namibia, Peru and the U.S.

Refined zinc metal production increased by 0.7%. Output rose in China but fell in India, Japan, Mexico, Namibia and Peru.

Refined zinc metal usage dropped 3.7%. Among the countries contributing to the decline were India, South Korea, Japan and the U.S., in addition to the E.U.

Unlike lead, China’s imports of zinc contained in zinc concentrates surged by 44%. However, China’s net imports of zinc metal fell 38%.

Lead, zinc prices surge

Despite the surpluses in H1, both lead and zinc prices have found support of late.

The LME three-month lead price closed Friday at $1,985/mt, or up 9.0% month over month.

Meanwhile, the LME three-month zinc price closed Friday at $2,474/mt, or up 11.79% month over month.

As MetalMiner’s Stuart Burns explained last week, supply-side fears have powered the recent rise in zinc and lead prices.

“Both copper and zinc rely heavily on mines in Chile and Peru for ore supplies,” Burns wrote.

“That reality is a fact highlighted in a recent report, which warned that mining companies operating in Peru are being forced to keep operations suspended.

“In addition, companies are halting new operations as confirmed coronavirus cases in the country surged past 300,000, with several of the new infections happening in the copper sector.

“Supply-side concerns have also provided support for lead (often co-mined with zinc). This is despite a massive surge in LME inventory arriving in last July, nearly doubling stock levels to 119,000 metric tons.”

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