Zinc, this blue-gray metal, is interesting because it can combine with other metals, but also with oxygen.
Furthermore, it reacts on contact with certain diluted acids, releasing hydrogen. The alloy is used for various applications and demand is such that production is increasingly high.
Regarding supply
It should be noted that zinc is the third most produced non-ferrous metal in the world after copper and aluminium. Indeed, if we look at the figures, zinc production amounts to 11 million tonnes per year.
The world’s leading zinc producer is unquestionably China, which currently dominates the market. Moreover, it continues to improve its mining and refining capacities. In second place after China is Australia, followed by Peru, Canada and North Korea.
Who demands so much zinc worldwide?
The main sectors that use zinc are notably construction and the automotive market. Zinc is used in construction for galvanizing other metals, notably steel.
Indeed, it has interesting properties that allow it to protect other metals against corrosion. Furthermore, zinc is found in the manufacture of brass in oxide form, in printing inks, but also in the manufacture of certain plastics and paints.
In short, zinc is a metal that is highly prized by the industrial sector. And although China is the world’s largest zinc producer, it also remains the world’s biggest consumer of zinc.
The evolution of the zinc price
Since China is on both sides (both producer and consumer), it therefore directs the evolution of zinc. Indeed, even if India has all the natural resources to rise to first place, it still cannot dethrone China. And since zinc is an industrial metal, its evolution depends on many factors, notably the global economic situation.
In 2008, zinc demand experienced an unprecedented decline in the United States and Europe. Moreover, it has not yet managed to return to its normal level to date. If an increase in demand is not expected soon, what is certain is that supply is likely to decrease.
Indeed, several mines will soon be depleted, which is likely to disrupt the market, as well as the current zinc price.
Zinc price at the scrap dealer and on the exchange
Zinc is listed on the London market, the London Metal Exchange (LME), it is indeed this market that sets the zinc price. This market is also the stage where futures contracts are traded.
Indeed, there are over 12 million futures contracts recorded there based on 25-tonne contracts, as well as options which alone represent more than 1.5 million contracts in the year. It should be recalled that the current zinc price is expressed in dollars and ranges between $800 and $1,600 per tonne.
Zinc is definitely among the world’s most sought-after metals; this is why supply can no longer meet demand.