Global Zinc Metals Report Q2 2016
BMI View: We maintain our average zinc price forecast for 2016 of USD1,750/tonne. We expect zincprices to reach a floor over the first half of 2016, and begin to stabilise thereafter, as production cuts shiftthe market to a deficit.Latest Developments & Structural TrendsPrice Forecast
We maintain our 2016 average zinc price forecast of USD1,750/tonne and expect prices to average onlyUSD1,950/tonne by the end of our forecast period in 2020. Our below-consensus forecast, whichrepresents only a 0.6% increase in prices between 2015 and 2020, reflects our broader view for basemetals to experience a stabilisation rather than a rebound.Production
Global refined zinc production growth will slow to 2.2% in 2016 from 3.3% in 2015, as firms curb outputin response to weak prices and two key mines come offline. We forecast global zinc output to increaseslightly, from 14.3 million tonnes (mnt) in 2016 to 15.3mnt by 2020, averaging 1.8% annual growth.
China will remain the key global producer of refined zinc, accounting for an estimated 44.4% of globaloutput in 2016 and increasing that share slightly to 45.4% by 2020. Chinese zinc production will increaseby only 1.0% in 2016, down from 8.5% in 2015, due to weak prices, a global ore deficit and thegovernment's efforts to consolidate the industry.
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