Global zinc long-term outlook Q1 2021 Report

Commodity Market Report 29 March 2021

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Report summary

The near-term outlook for the zinc market is dominated by the ongoing coronavirus pandemic and the consequences of the actions of governments to contain and mitigate against its effects. Further out, as the global economy normalises, the key dynamic will be the performance of the world's zinc smelters, especially utilisation rates at China's smelters. We forecast that the refined market will be well supplied for the rest of the decade with a peak of stock days in 2027 of 69 declining to 56 days by the end of the decade. However, such inventory levels fall well short of the peak of 126 stock days seen after the financial crisis in 2008/2009. Read further in our latest Global zinc long-term outlook for details on our market balance and price forecasts out to 2040.

Medium-term forecasts
Long term forecasts, base case and high-low thresholds
Risks to forecast
- Short term - upside
- Short term - downside
- Long term - upside
- Long term - downside
Will SEDEX deposits continue to dominate zinc mine supply and the implications for concentrate quality?
- Implications of different deposit on concentrate quality
- SEDEX deposits will continue to dominate future zinc supply
- Probable status projects of SEDEX origin
Overview
- China
- India
- USA
- Europe
Changes to forecast zinc consumption since previous quarter
- Asia (ex-China)
- China
- Oceania
- Smelter supply changes since last quarter

Tables and charts

This report includes 32 images and tables including:

Price forecasts and refined market balances
The zinc market is facing substantial surpluses in the concentrate and metal markets for the medium term
Concentrate market balances table

Investor sentiment is expected to support the zinc price despite rising metal stocks
Requirement for new mine production
Cost price relationships are used to forecast long-term prices
Zinc mine reserves by type (% share)
Zinc mine production by type (% share)
Long term growth in zinc consumption will be driven by Asia
Global zinc consumption is dominated by China
Per capita zinc consumption growth will be modest
Structural shifts in zinc's first uses have resulted in a sharp decline in intensity of use
Cyclical downturns have a significant impact on global zinc consumption
World mine capability forecasts by region and global market adjustment
Mine production capability dips in 2020. New project capacity and mine life extensions needed from 2024
Breakdown of the mine production adjustment
Mine project allowance breakdown
Requirement for new mine production
2020 mine production capability forecast has been cut by 254kt Zn compared with Q2 2020
Cumulative impact of changes to the mine production capability forecast for the period 2020-2024
Scenario price forecasts in real dollars
Scenario price forecasts in nominal dollars
Probable status project production by type (% share)
2020's metallic sheet production exceeds the 2016 all time high
Chinese per capita consumption will not track Japan and South Korea
Chinese outlook upgraded
Smelter production capability
World smelter capability forecasts by region and global market adjustment
Requirement of future smelter production
Smelter utilisation forecast to rise in the medium-term
2020 smelter capability forecast has been increased by 119kt and lowered by 95kt in 2021
Cumulative impact of changes to the smelter production capability forecast for the period 2020-2024