The Standing, Mine and Smelter Projects, and Economic and
Environment Committees and Industry Advisory Panel also met. In each of the
Committees a number of speakers made presentations containing valuable information
about current trends and issues in the global lead and zinc sectors.
Forecasts / Lead Outlook for 2017 and 2018 / Usage
According to ILZSG global demand for refined lead metal is forecast to rise by 5% to 11.15 million tonnes this year and a further 0.9% to 11.82 million tonnes in 2018. In 2017, the rise will be driven primarily by forecast growth in Chinese apparent usage of 11.3% which has been partially influenced by a rise in the use of three-wheeled e-trikes that has more than offset reductions in the e-bike sector as consequence of increased penetration by lithium-ion batteries. It is anticipated that European usage will rise by 2.2% in 2017 but remain flat in 2018. In the United States, increases of 1.1% and 1.8% are predicted in 2017 and 2018 respectively.
Supply
The Group expects world lead mine supply to rise by 5.6% to 5.06 million tonnes in 2017 and a more sedate 1.1% to 5.11 million tonnes in 2018. The rise in 2017 will be mainly due to higher output in China with smaller contributions from India, Kazakhstan and Canada, where Coeur mining’s Silvertip mine was commissioned in January. In 2018, production will benefit from the impending start-up of Minera del Caribe’s Castellanos mine in Cuba, the recent commissioning of Eldorado Gold’s Olympias mine in Greece and increased output in Mexico. Rises of 3.7% to 11.58 million tonnes and 1.6% to 11.77 million tonnes are forecast for world refined lead metal production in 2017 and 2018 respectively. These will be primarily driven by increased production in China. An expected 10.9% reduction in production in the United States in 2017 will be partially influenced by a cut in output at Quemetco’s City of Industry plant in California. This loss in output has resulted in an increase in U.S. imports of refined lead metal in particular from Mexico and the Republic of Korea. China’s imports of refined lead metal in 2017 are expected to exceed exports for the first time since 2012 with the extent of the difference forecast at 95,000 tonnes.
World Refined Lead Metal Balance
Having taken into account all of the information recently received from its member countries, the Group anticipates that global demand for refined lead metal will exceed supply by 125kt in 2017. This represents a change to the previous prediction of a balanced market with the main reasons for the revision being lower than expected lead metal output in the United States and increased Chinese net imports. In 2018, a deficit of 45kt is expected.
Zinc Outlook for 2017 and 2018 / Usage
According to the ILZSG world demand for refined zinc metal is forecast to increase by 0.7% to 13.93 million tonnes in 2017 and then by 2.5% to 14.28 million tonnes in 2018. After falling in 2016, apparent usage in the United States is forecast to rise by 12.2% this year with a further 2% rise anticipated in 2018. European demand is forecast to increase by a modest 0.4% in 2017 with rises in Belgium and the Russian Federation being largely offset by reductions in France and Germany. In 2018, a rise of 2.8% is anticipated which, if realised, will take European usage to its highest level since 2011. In China, the latest official reported figures indicate that a slowdown in refined zinc metal production will not be fully compensated for by an increase in net imports and therefore apparent demand is expected to fall by 1.8% in 2017. However, in 2018 demand is expected to rise by 3% mainly as a consequence of increased galvanised steel production.
Supply
After falling sharply in 2016, world zinc mine production is forecast to increase by 1.8% to 13.00 million tonnes in 2017 and by 6% to 13.78 million tonnes in 2018. The rise this year will be driven mainly by higher output in Eritrea due to increased output at the Bisha mine, India as a consequence of the completion of waste stripping work at Rampura Agucha’s underground operation, and in Peru due to higher zinc production at the Antamina mine. In 2018, Australian output will benefit from the opening of MMG’s Dugald River mine later this year. Similarly South African production will be boosted by the commissioning of Vedanta’s Gamsberg operation which is scheduled to commence production during the first half of next year. Increases in Finland and Greece are expected to add to European output with higher production also anticipated in China, Cuba and the United States. Global refined zinc metal production in 2017 is forecast to fall by 1.4% to 13.53 million tonnes despite a significant recovery in Indian output. A reduction in Canadian production has been influenced by the ongoing strike at Noranda Income Fund’s Valleyfield refinery. Output is also forecast to be lower in Canada, China, Peru, the Republic of Korea and Thailand where Padaeng’s Tak refinery ceased production in July. In 2018, a predicted increase in world refined zinc metal output of 3.9% to 14.06 million tonnes will be primarily a consequence of rises in Australia, Belgium, Canada, China, the Republic of Korea and Norway.
World Refined Zinc Metal Balance
With regard to the global refined zinc metal market balance, in 2017 the Group anticipates that metal output will be constrained by tightness in the availability of zinc concentrates and that global demand for refined zinc metal will exceed supply by 398kt resulting in a further draw down of both reported and unreported stocks. In 2018, the market is expected to remain in deficit with the extent of the shortage forecast at 223kt.
The following officers were elected for 2018:
Study Group: Chairman: Mr. Li Yusheng (China)
Standing Committee: Chairman: Mr. Henrique Santos (Portugal)
