Engineering & Mining Journal

NOV 2017

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 • NOVEMBER 2017 MARKETS The International Lead and Zinc Study Group (ILZSG) held its 62 nd Session in Lisbon, Portugal on October 26-27. The session included a meeting of the group's statistical and forecasting committee, which reviewed the current levels of world supply and demand and issued an out- look for 2018. World demand for refi ned zinc metal is forecast to increase by 0.7% to 13.93 million metric tons (mt) in 2017 and then by 2.5% to 14.28 million mt in 2018. After falling in 2016, apparent usage in the U.S. is forecast to rise by 12.2% this year with a further 2% rise anticipated in 2018. European demand is forecast to increase by a modest 0.4% in 2017. In 2018, a rise of 2.8% is anticipated, which, if realized, will take European us- age to its highest level since 2011. In China, the latest offi cial reported fi gures indicate that a slowdown in refi ned zinc metal production will not be fully compensated for by an increase in net imports and therefore apparent demand is expected to fall by 1.8% in 2017. In 2018, however, demand is expected to rise by 3% mainly due to increased galva- nized steel production. Supply After falling sharply in 2016, world zinc mine production is forecast to increase by 1.8% to 13 million mt in 2017 and by 6% to 13.78 million mt in 2018. The rise this year will be driven mainly by higher output in Eritrea due to increased out- put at the Bisha mine in India as waste stripping work at Rampura Agucha's un- derground operation is completed, and in Peru due to higher zinc production at the Antamina mine. In 2018, Australian output will benefi t from the opening of MMG's Dugald River mine later this year. Sim- ilarly, South African production will be boosted by the commissioning of Vedanta's Gamsberg operation, which is scheduled to commence production during the fi rst half of next year. Increas- es in Finland and Greece are expected to add to European output with higher pro- duction also anticipated in China, Cuba and the U.S. Global refi ned zinc metal produc- tion in 2017 is forecast to fall by 1.4% to 13.53 million mt despite a signifi cant recovery in Indian output. A reduction in Canadian production has been infl uenced by the ongoing strike at Noranda Income Fund's Valleyfi eld refi nery. Output is also forecast to be lower in Canada, China, Peru, the Republic of Korea and Thailand where Padaeng's Tak refi nery ceased produc- tion in July. In 2018, a predicted increase in world refi ned zinc metal output of 3.9% to 14 million mt will be primarily a con- sequence of rises in Australia, Belgium, Canada, China, the Republic of Korea and Norway. World Refi ned Zinc Metal Balance The ILZSG anticipates that zinc metal output will be constrained by tightness in the availability of zinc concentrates and that global demand for refi ned zinc metal will exceed supply by 398,000 mt result- ing in a further draw down of both report- ed and unreported stocks. In 2018, the market is expected to remain in defi cit with the extent of the shortage forecast at 223,000 mt. For more information, visit the ILZSG website at Zinc Outlook for 2018 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 (November 3, 2017) Precious Metals ($/oz) Base Metals ($/mt) Minor Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Gold $1,269.40 Aluminum $2,165.00 Molybdenum $16,000 Euro (€) 1.159 Silver $16.80 Copper $6,914.50 Cobalt $61,500 U.K. (£) 1.310 Platinum $918.00 Lead $2,475.00 Canada ($) 0.782 Palladium $995.00 Nickel $12,560.00 Iron Ore ($/dmt) Australia ($) 0.766 Rhodium $1,410.00 Tin $19,700.00 Fe CFR China $62.07 South Africa (Rand) 0.070 Ruthenium $120.00 Zinc $3,265.50 China (¥) 0.151

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