Engineering & Mining Journal

MAY 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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80 E&MJ • MAY 2019 MARKETS The Standing Committee of the Interna- tional Lead and Zinc Study Group (ILZSG) met recently in Lisbon. During the meet- ing, the committee received a review of the 2019 outlook for trends in world sup- ply and demand for lead and zinc. After declining by a marginal 0.2% in 2018, global demand for refi ned lead is anticipated to rise by 1.2% this year to 11.87 million metric tons (mt). This will mainly be a consequence of increases in usage in India, Japan and the Republic of Korea that are expected to more than off- set a reduction in China of 1.1%. Usage of lead metal in the United States is expected to grow by 1.1% and in Europe by 1.8%, infl uenced by rises in France and Italy. World lead mine production is fore- cast to rise by 1.8% to 4.75 million mt in 2019, principally due to expected increases in China and India. Output is also predicted to rise in Canada, Europe and South Africa. However, in Mexico, Peru and the United States, lead con- centrates supply is expected to be lower than in 2018. An anticipated increase in world refi ned lead metal output of 2.5% to 11.94 mil- lion mt in 2019 will be mainly infl uenced by further rises in China and India. Pro- duction is predicted to expand by 14.3% in Australia in 2019, by 3.6% in the Re- public of Korea and by 2.9% in Europe, infl uenced by rises in Belgium and Italy. Having taken into account all of the in- formation recently received from its mem- ber countries, the ILZSG anticipates that global supply for refi ned lead metal will exceed demand by 71,000 mt in 2019. Zinc Outook for 2019 Global demand for refi ned zinc metal is forecast to rise by a modest 0.6% to 13.77 million mt in 2019, after remain- ing stable over the past four years. It is anticipated that zinc usage in Europe will rise by 0.7%, infl uenced by marginal increases in France, Italy and Poland. In the United States, usage is predicted to grow by 1%. Apparent demand in China is forecast to increase by 0.6% after de- clining by 1.3% in 2018. After increasing by 1.3% in 2018, global zinc mine production is forecast to rise by 6.2% to 13.48 million mt in 2019. This will be driven mainly by an expected 29.4% rise in Australia and a further 3.3% increase in China. Output is also predicted to expand in South Africa, as a result of higher output at Vedanta's Gamsberg mine, and in Canada, Cuba, In- dia and Namibia. In Australia, the additional tonnage will be generated mainly as a conse- quence of higher production at the Du- gald River, McArthur River and Lady Loretta mines together with increases at the recently commissioned Century and Woodlawn tailings projects. In Europe, lower output is expected in Poland and Finland, where First Quan- tum's Pyhasalmi mine is due to cease pro- duction during the second half of 2019. This will partially offset rises in Greece, the Russian Federation and Spain, result- ing in an overall predicted increase in the European supply of zinc concentrates of 1.1% this year. In Peru and the United States, mine production is forecast to fall by 1.4% and 2.3%, respectively, in 2019. In Mexico, output is likely to be negatively affected by the recent suspension of production at Goldcorp's Penasquito mine. The ILZSG anticipates a rise in world refi ned zinc metal output of 3.6% to 13.65 million mt in 2019. This will be mainly infl uenced by a recovery in Chi- nese output of 5.3% after a reduction of 3.1% in 2018. Production in Europe is forecast to decline by 0.8%, primarily as a conse- quence of a signifi cant fall in Russian output due to the permanent closure of Electrozink's 100,000-mt/y-capacity Vladikavkaz plant in October 2018. This will more than offset predicted rises in France, Italy and Norway. Mexican refi ned zinc production is expected to increase in 2019, benefi ting from a recent 120,000- mt/y expansion of capacity at Industrias Penoles' Torreon plant. Rises are also forecast in India, Japan and Namibia. Regarding the global market balance, the ILZSG continues to anticipate that global demand for refi ned zinc metal will exceed supply in 2019 with the extent of the defi cit forecast at 121,000 mt. ILZSG Offers Lead and Zinc Forecasts Gold and silver prices provided by KITCO Bullion dealers ( Platinum group metals prices provided by Johnson Matthey ( Non-ferrous base and minor metal prices provided by London Metal Exchange ( Iron ore prices provided by Platts Iron Ore Index. Currency exchange rates were provided by (May 3, 2019) Precious Metals ($/oz) Base Metals ($/mt) Minor Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Gold $1,278.50 Aluminum $1,783.50 Molybdenum $27,060 Euro (€) 1.119 Silver $14.90 Copper $6,180.00 Cobalt $34,750 U.K. (£) 1.314 Platinum $855.00 Lead $1,880.00 Canada ($) 0.745 Palladium $1,359.00 Nickel $12,170.00 Iron Ore ($/dmt) Australia ($) 0.702 Rhodium $2,950.00 Tin $19,375.00 Fe CFR China $93.81 South Africa (Rand) 0.070 Ruthenium $267.00 Zinc $2,867.00 China (¥) 0.149

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