Zinc Fundamentals
Market overview
Statistics from the trade organization the International Lead and Zinc Study Group (ILZSG) show that there has been a supply deficit in global zinc output since 2004. Currently low stocks of refined zinc are contributing to market tightness and the industry expects the supply shortage to continue until at least 2008. At the end of June 2007, LME stocks of refined zinc amounted to just 72,400 tonnes only just above the year’s low of 70,400 tonnes recorded on 8th June and only some 10% of the peak levels of around 750,000 tonnes seen as recently as 2004/05.
| 2003 | 2004 | 2005 | 2006 | |
|---|---|---|---|---|
| Zinc Mine Production | 9,520 | 9,733 | 10,127 | 10,346 |
| Metal Production | 9,879 | 10,353 | 10,229 | 10,711 |
| Metal Consumption | 9,841 | 10,666 | 10,614 | 11,006 |
| Surplus/(Deficit) | 38 | (313) | (385) | (295) |
| Source: International Lead and Zinc Study Group | ||||
At a meeting in Windhoek, Namibia, in June 2007, the ILZSG reported that it expects global refined zinc output in 2007 to increase by 6.9% to 11.40 million tonnes of zinc while consumption increase by 4% to 11.45 million tonnes leading to a reduction in the supply deficit of some 50,000 tonnes.
Uses of zinc
The principal worldwide use of zinc is for the galvanizing of steel which consumes 49% of total demand. Zinc used in specialist alloys and in the production of brass and bronze each consume a further 18% with other uses such as for the production of chemicals and semi-fabricated castings account for the balance.
Zinc’s low melting point (420ºC), and strength make it suitable for die-casting and gravity casting for a wide range of products including castings for automotive and household “white goods”. It is also used in the manufacture of electrical components and batteries, and in the production of brass, bronze, and other alloys.
Mine Production of Zinc
Statistics from the British Geological Survey show that China is the world’s largest producer of zinc with 2005 output of 2.53m tonnes or 25% of global mine supply. Australia, with 1.37m tonnes or 13.5% of output is the world’s next largest producer, closely followed by Peru (1.2m tonnes or 11.9%). On a global scale, European mine production is a relatively modest 9.1% of world output, however within the EU, Ireland is the dominant producer with 2005 production of 445,400 tonnes comprising 49% of the total.