A recent report from the International Lead and Zinc Study Group found the global market for refined zinc was in deficit from January to July, with total reported inventories declining over the same time frame.
Global zinc mine production declined 6.1% during the same period, which mostly was due to substantial reductions in India, Australia, Ireland and Peru. Meanwhile, world refined zinc metal output fell 3.9% due to a significant drop off in Indian production and a decline in the U.S.
The report stated: “A rise in global usage of refined zinc metal of 0.7% was driven mainly by an increase in Chinese apparent demand of 6% that more than balanced sharp declines in the United States and Taiwan (China). European usage increased by 1.9%.”
Last, Chinese zinc imports contained in zinc concentrates fell 34.5% while the Far East nation’s net imports of refined zinc metal climbed 96%.
Zinc on the Rise?
Our own Raul de Frutos recently wrote that a year ago today, zinc was anything but bullish.
Global zinc markets were in surplus and prices were heading lower while sentiment in the mental complex was pretty bearish. But the picture quickly turned around earlier this year. For zinc buyers, the right time to hedge/buy forward was in April, when prices were still below $1,900 per metric ton, as we pointed out in our Monthly Outlook.