With more than 50% share the construction sector is the main application area of zinc. Here steel is provided with a thin layer of zinc to protect it from corrosion (rust). Galvanized steel has a lifetime 12 times longer than ordinary steel. Other fields of application are the automotive industry (25%) and the industrial machinery with 10%. However, zinc is also used in medical applications, as an additive in agrarian fertilizers, in sun creams as well as in various cosmetic products.
Fundamental situation at the zinc market:
According to a survey conducted by the Lead and Zinc Study Group (ILZSG), the refined zinc mine production in 2016 amounted to a total of 13,711,000 tons or 30.28 billion pounds. Since the industrial consumption in the same year was 13,856,000 tons, one can speak of a structural supply deficit. This deficit also existed in the first half of 2017. This supply / demand situation has led to a significant increase in the price of zinc over the last two years. The price of one tonne of zinc has increased by more than 116% since the beginning of 2016 to October 2017 – the metal thus ranked among the price-gainers in the commodity market!
Over the next two years we expect a stable zinc price in a price range of 2,800 and 3,500 USD per ton. As 2018 will see the expansion of various mines and the opening of large world class mines (including the “Gamsberg Mine” in South Africa with 250,000 tonnes in the first construction phase), we are not expecting an immediate test of the all-time high of USD 4,600 per tonne of zinc (USD 2.08 per pound) from the year 2006.
We have also noted that global inventories have declined massively over the last two years. For example, current stocks at the LME of 250,000 tonnes at the beginning of October 2017 are only about 11.5 days to ensure physical industrial demand. In December 2016, more than 434,000 tonnes of zinc were available in the LME warehouses. The main reason for the massive decline in inventories was on the one hand the significant increase in the demand for zinc and a lower metal supply from the zinc producers. Various large mines, e.g. Brunswick 12, Lisheen or even the Century mines in Australia had to be closed because of exhaustion.
Scientific data / background knowledge:
The chemical element symbol of zinc is Zn with the order number 30. The melting point is 420 degrees Celsius and the boiling point is 907 degrees Celsius. Zinc is also essential for the growth and development of almost all life. Between 1.4 and 2.3 grams of zinc are to be found in the average, healthy adult. Zinc is 100% recyclable – it is estimated that more than one-third of the consumed zinc in North America is produced from recycled materials.
The alloy of copper with zinc produces brass, that inter alia was used by the Romans in coins.
The most common zinc mineral is sphalerite also known as zinc blende. This mineral crystallises from the hydrothermal solution as pure zinc sulphide and is found in almost all currently mined zinc deposits. Zinc is often mined in association with lead, copper, silver and other metals.
On the website of the trading company Westmetall GmbH & Co. KG, which is specialized in the non-ferrous metals sector
you will find in addition to commodities prices also some price graphs of LME warehouse stocks of various industrial metals.