Positive Zinc Outlook Not Necessarily a Sure Thing

Zinc market participants have likely grown used to hearing positive predictions about the metal, but in a recent article Mineweb’s Kip Keen takes a look at the flip side of the coin.

As quoted in the market news:

For a zinc refresher I called up Jessica Fung, a BMO mining analyst with a head for base metals, to talk about her more conservative view of the zinc sector.

Let’s dig into some of her research.

First zinc consumption. It will come as no surprise that China consumes a lot of the world’s zinc. Of total consumption last year China gobbled up about 46 percent, or 6,063 kt.

But, and this is one of the key considerations, China, unlike in the case of say copper, produces a huge amount of its own zinc. Zinc mine supply in China back in 2000 accounted for about 20% of global mine supply. Now it accounts for about 37%, which underscores massive mine supply growth over the past decade and near-half in which it demand also soared.

Fung is of the mind that this will continue, with potential for consolidation in the zinc mining sector in China and, as she puts it, economies of scale to be realized.

Click here to read the full Mineweb report.