The International Lead and Zinc Study Group (ILZSG) has dramatically revised its forecast for the global zinc market in 2024, projecting a substantial supply deficit of 164,000 metric tons. This marks a stark reversal from the group’s April prediction of a 56,000-ton surplus, highlighting the rapidly changing dynamics in the zinc industry.
The primary driver of this deficit is a continuing decline in mine production, which is expected to fall by 1.4% to 12.06 million tons in 2024. This will mark the third consecutive year of decreasing output, with production levels now 5.7% lower than the zinc mining boom of 2021. The downturn is particularly pronounced in Europe, where regional production is set to plummet by 11.4% due to the suspension of key mines in Ireland and Portugal.
China, home to the world’s largest smelter network, is feeling the impact of this raw material squeeze. The country’s refined zinc output is declining at an accelerating rate, with estimates suggesting a 10.4% year-on-year drop in September. This trend is expected to contribute to a 1.8% decrease in global refined zinc production for 2024.
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The supply crunch has led to unprecedented market conditions, with spot treatment charges for Chinese zinc concentrate imports turning negative for the first time in August. This situation underscores the severe mismatch between smelter demand and raw material availability.
On the demand side, global usage is forecast to grow by 1.8% in 2024, with markets outside China driving growth. Chinese demand is expected to increase by only 0.7%, reflecting the country’s struggling property sector and its impact on galvanized steel consumption, zinc’s primary end-use.
Looking ahead to 2025, the ILZSG anticipates a return to surplus, projecting an excess of 148,000 tons. This forecast is based on expectations of higher zinc prices stimulating production restarts and new projects coming online. However, recent setbacks, such as production downgrades at the Kipushi mine in the Democratic Republic of Congo, highlight the ongoing volatility in the zinc supply chain.
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