Commodity market report

Global zinc short-term outlook January 2017

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Report summary

With the mating season well underway market rumours suggest that mines and smelters are very far apart in the 2017 annual contract negotiations. We forecast a very tight concentrate market and a rapidly rising zinc price (from an average $2700/t in Q1 to $3700/t in Q4) this year. There is a growing risk that the concept of price participation could be abandoned. TCs would then be set by the mine or smelter side with the stronger negotiating position that year determined solely by the availability of concentrate. This would result in a new inverse correlation between price and TC. This year could be when the mine side makes this move and could result in falling TCs. It would be most unwelcome and resisted by smelters. Traditional concentrate flows could be substantially disrupted as could business that is priced using benchmark reference contracts.

What's included

This report contains

  • Document

    Global zinc short-term outlook January 2017

    PDF 776.14 KB

  • Document

    Data Tables Zinc STO January.xls

    XLS 288.50 KB

  • Document

    Global zinc short-term outlook January 2017

    ZIP 847.10 KB

Table of contents

  • Executive summary
  • Supply-demand balances
  • Demand
  • Supply

Tables and charts

This report includes 28 images and tables including:

Images

  • Cash to three months spreads narrow as price rises
  • Comparison of US zinc exports in the first eleven months of 2014, 2015 and 2016
  • 2017 gets underway with synchronised growth in manufacturing
  • US housing starts grow again in 2016, but pace of growth is slowing
  • Chinese smelter revenue from imported spot concentrate
  • Chinese smelter revenue from domestic concentrate
  • Positive correlation between zinc price and TC
  • Negative correlation for copper since PP was removed in 2006
  • Chinese sources of concentrate imports
  • Index of monthly Chinese mine production
  • Index of monthly Chinese smelter production

Tables

  • Zinc key forecasts
  • Chinese white goods output posts good growth in 2016
  • Selected transport infrastructure targets for 2017
  • Galvanized sheet and metallic coated sheet production
  • Key indicators of zinc consumption
  • Treatment charges $/t of concentrate
  • Concentrate Balances
  • Concentrate balance and TC forecast
  • Zinc mine capability, market adjustment and production (kt Zn)
  • Supply-demand balances: Table 1
  • Supply: Table 5
  • Global zinc consumption - (kt Zn)
  • Supply: Table 7
  • Global zinc smelter production (kt Zn)
  • Zinc stocks, prices and premiums
  • Chinese trade data (kt)
  • Global slab zinc supply/demand balance (kt)

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