Zinc an Outperformer in March Month

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Money Market Guru — Zinc, a metal that is used in Galvanization had a bull run in the month of March 2017. On LME, prices averaged at $ 2782 per tonne in March 2017 compared to $ 2848 per tonne in February 2017, up by a whopping 54%.

As per the latest forecast of International Lead and Zinc Study Group (ILZSG), global market for refined zinc metal recorded a deficit of 286000 tonnes. Inventories held in LME, Shanghai Futures Exchange and Chinese State Reserve Bureau (SRB) warehouses together with those reported by producers, consumers and merchants decreased by 82000 tonnes to total 1384000 tonnes. A substantial 43,1% decline in Australian zinc mine output was primarily a consequence of the closure of MMGs Century mine at the end of 2015 and a reduction in output at a number of Glencores mines. Production was also significantly lower in Ireland, due to the shutdown of Vedantas Lisheen operation, India and Peru. However, these reductions were offset by increases in Bolivia, Canada, China and the commissioning of new production in Eritrea. As a consequence, overall world production was at a similar level to that in 2015.

World output of refined zinc metal was also close to the total recorded in 2015 with increases in China and the Republic of Korea being balanced by a significant fall in India and reductions in Argentina, Australia, Belgium, Finland, France, Japan, Mexico, Poland and the United States. A rise in global usage of refined zinc metal of 3.6% was primarily driven by sharp increases in apparent demand in China and India.

A fall in apparent usage in the United States of 12.4% was possibly affected by drawdowns in unreported stock levels. European demand was 0.3% lower. Chinese imports of zinc contained in zinc concentrates in 2016 amounted to 817kt a decrease of 40.5% compared to 2015. Net imports of refined zinc metal decreased by 9.8% to total 403kt. — Money Market Guru

Zinc an Outperformer in March Month | Money Market Guru