Categories:
Base Metals
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General Market Commentary
Topics:
General Base Metals
/
General Market Commentary
Zinc, lead prices gain on deeper deficits
The price of zinc continued its good run on Monday, rising to $2,825 a tonne after a report showed the market moving deeper into deficit. Zinc has advanced 10% year to date, building on a 60% rally in 2016, the best performing commodity of last year.
The global lead market recorded a deeper deficit of 178,000 tonnes during January to end-May from 133,000 tonnes during the same period last year according to data from the Lisbon-based International Lead and Zinc Study Group released today.
For the first five months of the year, total reported inventories declined by 167,000 despite mine output increasing by 320,000 tonnes to 5.37 million tonnes from January to May, up 6.3% compared to 2016 as a result of higher production in Eritrea, India, Peru and Turkey that more than balanced reductions in Australia and the United States.
After a sharp fall in 2016, US apparent demand for refined zinc metal increased by 19% according to ILZSG. In China, apparent usage decreased by 2.8% and in Europe consumption rose 1.8%. On a global basis demand was a modest 1.1% higher.
Chinese imports of zinc contained in zinc concentrates totalled 477,000 a rise of 28% compared to the same period of 2016, but the country’s net imports of refined zinc metal decreased by 48% to 129,000.
Lead
The price of lead, often a byproduct of zinc mining, also gained on Monday, rising to $2,330 a tonne after the release of the ILZSG study. Lead is up 17.5% in 2017 and 13% over the past month.