The International Lead and Zinc Study Group (ILZSG) recently released preliminary data for world lead and zinc supply and demand during the first half of 2013. Provisional information reported to the ILZSG for the period January to June 2013 indicates that the global market for refined lead metal was in deficit by 40,000 metric tons (mt). Over the same period, total reported stock levels decreased by 30,000 mt. 

Global lead mine output increased by 4.6% compared to the same period of 2012. This was mainly due to higher output in China, Peru and Turkey that more than offset reductions in Australia, Canada and Mexico. An increase in Chinese refined lead metal output of 12.4% was the main factor behind an increase in global output of 4.4%. Production was also higher in Italy and Mexico. 

Global usage of refined lead metal increased by 6.8% primarily as a consequence of rises in apparent demand in China and the United States of 9.3% and 10.8%, respectively. Usage in Europe also rose by 3.4%. 

Lead and Zinc Prices Climb Slightly
Spot prices for lead and zinc currently stand at $2,151/mt and $1,868/mt, respectively. Both metals have recovered from last month’s lows of $2,090/mt for lead and $1,822/mt for zinc. They have steadily declined since February when lead and zinc spot prices peaked at $2,443/mt and $2,141/mt, respectively.

According to preliminary data recently compiled by the ILZSG, over the first half of 2013, global supply of refined zinc metal exceeded demand by 44,000 mt and total reported inventory levels decreased by 123,000 mt. 

An increase in global zinc mine production of 1.1% compared to the first half of 2012 was influenced mainly by higher output in China, India, Peru, Turkey and the United States. This was sufficient to offset decreases in Australia, Canada, Ireland, Mexico and Sweden. A 3.8% rise in global refined zinc metal output was primarily a consequence of increases in Canada, China, India, the Republic of Korea and Peru. 

A rise in Chinese apparent demand for refined zinc metal of 8.9% was the main driver behind an increase in global usage of 5.8%. Demand in Europe rose by 2.6%, and in the United States by 4.2%.

Global lead mine output is forecast to increase by 3.5% to 5.4 million mt in 2013. In Australia, production will benefit from the recent reopening of Ivernia’s 85,000-mt/y-capacity Paroo Station mine. World zinc mine production will rise by 2.3% to 13.9 million mt. Output in Africa will be positively influenced by the opening of Glencore and Blackthorn Resources’ Perkoa operation in Burkina Faso. Similarly, the commissioning of the Kayar and Valardena mines will contribute to rises in India and Mexico, respectively. Canadian output is forecast to fall by a significant 28% mainly as a consequence of the closure due to reserve depletion of Xstrata’s Brunswick and Perseverance operations.