The Statistical and Forecasting Committee of International Lead and Zinc Study Group (ILZSG) in its session held on 27-28th October in Lisbon, Portugal reviewed the current levels of supply and demand for lead and zinc. The meeting also published the supply and demand forecasts for the metals for 2016 and 2017.
According to ILZSG, the global demand for refined lead metal is forecast to total 11.19 million tonnes in 2016, marginally higher by 2.8% over the previous year. The demand will further rise by 1.3% to 11.34 million tonnes in 2017.
The Chinese demand for lead-acid batteries from e-bike sector has reported sharp decline. However, the jump in automobile production and sales has resulted in increased sales of lithium-ion batteries. The country’s lead demand is forecast to rise by 2.5% in 2016 and by 1.1% in 2017, according to ILZSG. The resurgence in automotive sector will drive lead usage in the European region. The demand for the metal is expected to grow by 5.3% in 2016. However, ILZSG forecasts demand to remain flat in 2017. The US demand is forecast to rise by 1.9% each in 2016 and 2017.
The global lead mine supply is forecast to total 4.75 million tonnes in 2016, marginally lower by 0.3% when matched with the year before. The rise in production by China will be offset by production declines in other major producing countries including Australia, India, Mexico and the US. ILZSG predicts 3.3% rise in production during 2017. The Chinese imports of lead contained in lead concentrates in 2016 are likely to drop significantly from 2015 levels.
The global refined lead metal production is anticipated to increase by 3.6% year-on-year to 11.23 million tonnes in 2016, on account of increased output by China and Korea. Incidentally, Korea Zinc had successfully commissioned a new 130,000 tonne per year capacity primary lead plant during end-2015. The global refined lead metal output will further rise by 1.2% in 2017 to total 11.36 million tonnes. The output by Belgium, China, Mexico and the US are likely to show significant improvement during the year.
Overall, refined lead metal is likely to end in surplus of 42,000 tonnes in 2016. ILZSG predicts a closer balance in 2017, with the surplus falling to 23,000 tonnes.
The global demand for refined zinc metal is forecast to total 13.57 million tonnes in 2016, marginally higher by 0.6% over the previous year. The demand will further rise by 2.1% to 13.85 million tonnes in 2017.
In China, the anticipated rise in demand from automotive sector is likely to be offset by decline in exports of galvanized sheet steel. The Chinese zinc demand is expected to increase by 1.8% and 1.3% in 2016 and 2017 respectively. The European demand is likely to remain flat. The zinc usage by the region may witness marginal rise of 0.7% and 0.5% in 2016 and 2017 respectively. Meantime, the US demand is expected to fall by 8.7% this year. However, the demand is likely to rebound strongly by 11.8% in 2017.
ILZSG forecasts world zinc mine production to fall by 5.6% to 12.47 million tonnes in 2016, mainly on account of drop in output by Australia, India, Ireland and Peru. The global zinc mine production is expected to recover by 5.9% to 13.20 million tonnes in 2017, mainly on the back of increased output from Australia, India, Peru, China, Kazakhstan, Mexico and Russia. The Chinese imports of zinc contained in zinc concentrates in 2016 are likely to drop significantly from 2015 levels of 1.37 tonnes.
The refined zinc metal output is expected to fall by 3.2% to 13.22 million tonnes in 2016, whereas it is forecast to recover by 2.9% to 13.60 million tonnes in 2017.
The refined zinc metal is likely to end in deficit of 349,000 tonnes in 2016. The market will continue to remain in deficit in 2017. However, the extent of deficit will be reduced to 248,000 tonnes.