Forecast by quarter until mid-2024

Rest of 2023 and 1st half 2024: Prices are expected to generally trend downwards as mining supply growth outweighs recovery in global demand for refined zinc as global growth improves. However, tighter margins should discourage supply growth somewhat towards the end of the period.

Rising LME zinc inventory levels since February 2023 should support near term price declines.
In 2022, global zinc ore and refined zinc production declined 2% and 1.3% year-on-year, respectively, on disruptions to European supply amid Russia’s invasion of Ukraine and as China’s Covid restrictions constrained smelting activity. However, significant supply growth is expected over the period as several global mining and smelting projects come online or ramp up production, alongside an expected near term pick up in China’s output (48% of global refined zinc production in 2022) as its economic activity recovers.
Russia’s Pavlovskoye and Ozernoye projects are expected to start production in 2024 with ramp ups planned to 823ktpa zinc capacity combined - 5.9% of 2022 global zinc production. However, due to the conflict with Ukraine, regional projects are subject to delays.
Vedanta Zinc’s Gamsberg in South Africa is forecasted to continue its ramp-up to reach production of 250ktpa in 2023 - 1.9% of 2022 global mine production.
Australia’s output should rise as Sibanye-Stillwater’s Century mine ramps production by 92% to 230ktpa by 2024 - 1.8% of 2022 global mine production - and its Silver King and East Fault Block expands by 39% to 35ktpa from 2nd half 2023.
In Kazakhstan, Glencore commissioned the Zhairem mine in 2020 which should reach 160ktpa in 2023 - 1.2% of 2022 global mine production.
Grupo Mexico’s zinc production capacity is expected to double via the construction of a 100ktpa concentrator at its Buenavista project - expected to be operational in 2023.
Brazil’s Aripuana zinc project started production in July 2022 and should reach full capacity of 72ktpa in the 2nd half of 2023.
However, European supply concerns amid production disruptions and the conflict in Ukraine should hold back global supply growth in the near term somewhat, providing some support to prices.
In Germany, Glencore placed its 165ktpa Nordenham smelter (1.2% of 2022 global refined zinc production) on care and maintenance from November 2022.
In the Netherlands, Nyrstar’s Budel zinc smelting operations (315ktpa zinc production capacity - 2.3% of 2022 global zinc production) resumed production on a limit basis in November, after being placed on care and maintenance on 1st September 2022 due to high electricity prices. The company also completed scheduled maintenance work at its Auby smelter in October 2022, but the facility only resumed production in March 2023 on a variable basis amid near term market uncertainties.

Rolling Commodity Forecast

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Every Monday we provide a summary of important news & developments over the past 7 days relating to: African commodity projects, infrastructure projects of significance in Africa & key commodity price trends.