The report by the British basic mineral Intelligence Agency (BMI) believes that mineral company will cut production because of ore shortages and that there will be a shortage of refined zinc market in the world in the next few years.
The report says zinc smelters, especially from China, will face the challenge of concentrates supply in the coming quarters. The shortage was due to a 2016 cut in production, with two major mines closed.
BMI predicts that zinc market will be optimistic in the long run. From 2017 to 2021, the average annual growth rate of global refined zinc production and consumption was 1.9% and 1.6% respectively. Slowing growth in China's steel sector will put pressure on global refined zinc demand, reducing the gap in the world's refined zinc in 2021.
The research is expected to increase production of new projects, and new smelters will gradually increase production. By 2021, output will reach 15 million tons.
China's refined zinc output will increase from 6 million 300 thousand tons in 2017 to 7 million tons, with an average annual growth rate of 2.3%. BMI believes that China will still be an important producer of refined zinc in the world, accounting for 44.7% in 2017 and 46.4% by 2021.
Similarly, zinc production in India grew by an average of 6.5% over the past 2017-21 years.
From the demand, the expected decline in global steel production shows that the world's refined zinc consumption will decrease. By 2021, the annual growth rate is expected to be 1.6%. Over the past few years, global refining zinc consumption has increased by 2.2%. In 2017, China's zinc consumption grew by 2.5%, to 0% by 2021.
But in the United States, iron and steel production stagnated, economic growth unstable, zinc consumption will be affected. Zinc consumption in the United States is projected to increase from 619 thousand tons in 2017 to 631 thousand tons in 2021.