There are good prospects that zinc supply would anticipate a fairly long period of relative stability and abundance. Reductions in zinc supply which periodically occur due to price volatility, zinc deposit depletion at some mines (e.g. Lisheen mine run by Vedanta Resources in Ireland), trade barriers, increased consumption from various sectors and some other factors, are unlikely to loom in the near future.
The correlation between zinc production and demand is poised at almost steady equilibrium at least on the global scale, though regional imbalances are highly probable. Global zinc demand is projected to rise by 3.7% to 14.04 million tonnes in 2015. In the same vein, it is anticipated that world zinc supply will increase likewise by 3.7% to 13.79 million tonnes in 2015. Global production of refined zinc metal in 2015 is expected to increase by 5.2% to 14 million tonnes with forecasted further growth in Chinese production.
However, large growth in zinc exports from China is hardly anticipated. China’s policy to restrict the export of rare earth metals, including zinc, has been a matter of negotiations with the WTO for a long time. Currently, China is stepping up efforts to restrict illegal mining and exporting of rare earths, as well as curtails metal recovery and production at environmentally hazardous mines and factories. These measures coupled with ongoing economic slowdown in the country will hardly generate large zinc export growth rates. Chinese metal producers have been also struggling with current overcapacity, but China is still the leading zinc mine and smelter producing country with one of the largest zinc resources in the world. This supply and demand equilibrium and macroeconomic uncertainties of both regional and global character will reflect in forecasted zinc prices which will demonstrate smaller degree of fluctuations in the nearest future.
More information on the zinc market can be found in the insightful report “Zinc: 2016 World Market Review and Forecast”.