Subject
Zinc market
Significance
The zinc price rose by more than 50% last year -- the best performance of all base metals traded on the London Metal Exchange (LME). After approaching a ten-year high of 2,900 dollars per tonne in November, the price remains sharply higher than its low of 1,500 a year ago. Mine closures in Australia and Ireland removed 1.1 million tonnes of zinc from the market, limiting the increase in output last year to an estimated 0.5%. In contrast, demand rose strongly, led by Chinese infrastructure spending, which accounts for around one-quarter of zinc demand. The 2016 deficit was estimated at 400,000-600,000 tonnes, the fifth year of shortfalls.
Impacts
Northern Chinese smelters are increasingly turning to North Korea for zinc concentrate, making the country China's third-largest supplier.
Namibia's Skorpion mine may close two years earlier than forecast, removing an estimated 140,000 tonnes of refined metal from the market.
South Africa's Gamsberg mine, one of the world's largest undeveloped zinc deposits, is due to begin production in 2018.
Rising prices are attracting more buyers for the mines that Belgium-based producer Nyrstar has for sale under its restructuring programme.
