Refined zinc metal output will rise to 13.81 million tonnes next year, up 3% from the expected output of 13.41 million tonnes this year, the group’s director of economics and environment Meng Jianbin told delegates at the 21st China International Lead and Zinc conference in Baoji, Shaanxi province.
The output estimate for 2019 is lagging behind that of the expected metal usage of 13.88 million tonnes for the year, according to Meng, implying a deficit of over 0.72 million tonnes.
Notably, next year’s deficit in the refined zinc market is not led by a decline of mined zinc supply – previously the main reason behind the tight zinc supply following massive capacity closures in 2015 and 2016.
The study group expects global mined zinc supply to rise moderately in 2019 after multiple greenfield projects came online subsequently.
Mined zinc supply will rise to 13.87 million metal tonnes in the year ahead, up 6% compared with the 2018 forecast from the group.
Vedanta’s Gamsberg project in South Africa will make its first delivery in November, while MMG’s Dugald River project has ramped up its output to generate 150,000 tonnes of zinc in concentrates this year.
Century zinc mining operation’s first zinc concentrates output out of tailing reprocessing has also arrived at China recently, adding tonnage to the market.
The higher availability of zinc concentrates and reduced smelting capacity pushed spot treatment charges on a cif Asia Pacific basis to $120-140 per tonne at the end of October. This compares with $115-135 per tonne a year earlier.
The refined zinc market is expected to be in a slight deficit next year despite improved mined zinc supply, a representative from the International Lead and Zinc Study Group said on Wednesday October 31.