Growing zinc deficiency will drive prices

Several large mines closed last year and zinc production at Vedanta Resources' Lisheen mine in Ireland is in decline, and MMG's Century mine is expected to stop in 2015. At the same time, only a handful of new zinc projects remain, fueling production to replace this yield loss.

Data compiled by an international Research Group showed that global use of refined zinc exceeded production by 60 thousand tons in 2013. Glencore Xstrata, the world's largest zinc miner, said the zinc market went into deficit in 2013 for the first time in five years, driven by China's continued appetite for imports of the metal and a rebound in physical demand in the US and Southeast Asia.



Troy O'Dwyer, an analyst at Panmure Gordon & Company SAOD, said that “We expect supply shortages to widen this year, pushing prices up even further, while new mine development will not cover mine closures and global demand growth in 2014 and 2015. years ". He said the average metal price will be $ 2,031 a tonne this year, up 6 percent from 2013, and that he expects to average $ 2,125 a tonne this year.

Global stocks have dropped significantly since late 2013 to their lowest level since 2010. Low zinc prices in recent years have discouraged large investments, while some projects have faced delays. Troy said consumption growth was driven by three key markets in China, the US and Europe.