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

Global aluminum and zinc market balances were in surplus last quarter, while the lead market was in deficit, according to the World Bureau of Metal Statistics (WBMS).


Aluminum had a surplus of 709,000mt in Q1 2020, which was close to the full-year surplus of 761,000mt in 2019, while zinc recorded a surplus of 68,000mt during the first three months of 2020 compared to a full-year deficit of 75,000mt in 2019. The lead market’s deficit declined to 17,000mt in Q1 2020 from a full year deficit of 237,000mt in 2019, according to WBMS data.


Aluminum demand, output rises

Primary aluminum demand rose by 532,000mt, or 3.5pc, to 15.7mn mt in Q1 2020 from the same period last year, while production rose by 5.8pc during the same period. Global demand for aluminum stood at 5.24mn mt in March 2020, while aluminum production during the same month was 5.54mn mt.


WBMS data estimated output from China at 8.84mn mt during Q1 2020 due to higher availability of raw materials, like bauxite and alumina. In fact, Chinese aluminum accounted for 54pc of global production. China exported 1.05mn mt of aluminum semis between January and March 2020, rising from 1.21mn mt exported during the same period last year, thereby making it a net importer of unwrought aluminum, despite higher production levels.


Apparent demand for the material in China rose by 5.8pc in Q1 2020 compared to the same period last year, even though the production of semis fell by 6pc. In the EU, aluminum production last quarter was 0.5pc lower than Q1 2019, while demand fell by 211,000mt from the same period last year. However, production rose in North America by 4.1pc during the same period. 


Aluminum inventory fell in January and February before rising again in March to close Q1 2020 at 2.17mn mt, 22,000mt above 2.15 mn mt at the end of the prior quarter.


Lead output falls in Q1

Global refined lead production fell by 4pc to 2.9mn mt in Q1 2020 compared with the same period last year. In March, refined lead production was slightly lower than demand at 1.030mn mt. Global demand for the material was 1.035mn mt in March, according to WBMS.


Higher demand was led by the US, where apparent demand increased by 24,000mt in Q1 2020 from the same period last year. Chinese apparent demand, which comprised 41pc of global lead demand, was reported at 1.19mn mt, 220,000mt lower than the first three months of 2019.


Production, demand rise for zinc

Global refined zinc demand increased by 5.8pc in Q1 2020 and was 185,000mt higher than reported demand during the same period last year. China represented 46pc of the global zinc demand at 1.54mn mt in the first three months of the year. In March, according to WBMS data, zinc demand was reported at 1.15mn mt.


Refined zinc production rose by 6.9pc in the first quarter of the year while slab zinc production in March alone stood at 1.12mn mt.

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