CHICAGO -- The world's surplus production of refined zinc metal declined by 44% to 166,000 tonnes in the first eight months of 2010, the Portugal-based International Lead and Zinc study group said Tuesday in reporting preliminary data.
But inventories of the metal increased by 181,000 tonnes during the same period and mine production increased 11.3% or 823,000 tonnes to 8.1 million tonnes.
Zinc mine production, metal production and metal usage peaked in 2008 and declined last year with mine production and metal output down about 3 percent while metal usage was down 5 percent.
A 17.8% increase in global refined zinc metal demand in the first eight months of this year was driven mainly by strong recoveries in Europe, Japan and South Korea as well as growth in Chinese apparent usage of 13.9%, ILZSG officials said.
They added that the rise in world zinc mine production in the first eight months of the year was mainly credited to increasing output in Australia, China, India, Finland, Kazakhstan, Mexico and Russia.
Global refined zinc metal production increased 15.3% in the period, with increased output recorded in Belgium, Brazil, Canada, Germany, India, Japan, South Korea, the Netherlands, Peru and the United States.
The trade group had earlier this month that a global rise of 13.1% in to 12.3 million tonnes of refined zinc metal is expected this year and that a further 6.3% increase in global usage is expected next year. Global zinc mine production is forecast to grow 10.7% this year to 12.5 million tonnes largely due to a 24% incre3ase in Chinese production. A further 6.6 % increase was forecast for next year.
The trade group said that the global refined zinc market is expected to remain in surplus both this year and next year with excess refined zinc metal expected to total 233,000 tonnes this year and 161,000 tonnes in 2011.
ILZSG also reported preliminary eight-month results for lead production and usage which showed that surplus output of refined lead metal declined 7% from year to year to 49,000 tonnes and inventories increased 42,000 tonnes. Mined lead production was up 9.3% OR 226,000 tonnes to 2.6 million tonnes. Largest mine increases were in China, India, Mexico and Russia while declines were noted for Ireland, Peru and the United States.
The trade group has forecast that global refined lead metal usage will increase this year by 4.5% to 9 million tonnes and an additional 5.8% to 9.55 million tonnes next year. Chinese apparent demand is expected to be adversely affected this year by destocking of unreported inventories built up last year despite strong increases in automotive and electric bike demand, officials said.
No change in the 90,000 tonne surplus of supply to demand is expected between 2010 and 2011, ILSZG officials said.