Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The usage of refined lead and zinc is expected to increase by 3.9pc to 11.97mn mt and by 4.3pc to 13.78mn mt, respectively, in 2021, according to the International Lead and Zinc Study Group (ILZSG).


Lead and zinc consumption in Europe is expected to surge after hitting a bottom due to the COVID-19 pandemic last year. Asian countries like South Korea, India, and Japan are also likely to increase their usage of these metals this year, ILZSG indicated in its forecast on Friday. 


Consumption of lead in China is expected to inch up by only 0.8pc this year, while zinc usage will rise 1.8pc. On the other hand, zinc usage in Japan will increase by 15.4pc and rise in Europe by 6.9pc. South Korea’s lead consumption is expected to increase by 12.2pc, followed by Japan where it will increase by 10.6pc, India by 9.6pc, and Europe by 7.7pc this year.


Zinc supply to rise

In 2021, ILZSG expects global zinc supply from mines to increase by 5.7pc to 12.92mn mt driven by increased output from mines in the US, India, Australia, Bolivia, Mexico, Peru, South Africa, and Kazakhstan. Mining output had declined by 4.9pc in 2020. 


ILZSG noted that zinc supply in Europe may be impacted by the shutdown of the Olkusz-Pomorzany mine in Poland in December 2020 but could be offset by rising in production from Greek and Irish mines. As a result, the group has predicted a 2pc rise in European production this year. In China, zinc production will likely increase by 1.7pc after dropping by 3.7pc last year.


Refined zinc output is expected to increase by 3.1pc to 14.13mn mt this year after growing by 1.6pc last year, led by increases in the US, where the American Zinc Recyclers (AZR) ramped up their secondary plant’s annual capacity to 155,000mt in Mooresboro, North Carolina. In China, the output of refined zinc will be rangebound, growing 2.8pc this year against 2.9pc in 2020.


Still, the zinc market is expected to report a surplus of around 353,000mt this year, as the supply of refined zinc is expected to outpace demand.


Lead supply to outpace demand

Supply of lead from mines will rise by 5.1pc to 4.75mn mt in 2021, according to ILZSG, which attributed the increase to more output from Peru, Mexico, Australia, and China.


Increased production of refined lead in South Korea, India, Belgium, and China will boost global refined lead output by 3.3pc to 12.07mn mt this year. Conversely, refined lead production in the US is projected to fall after Clarios recently announced the closure of its 100,000mt per year Florence secondary smelter in South Carolina.


Like zinc, refined lead supply is also expected to outpace demand this year leading to a surplus of 96,000mt at the end of 2021. 

Leave a Reply

Your email address will not be published.