Global zinc market in small surplus in early 2015

Statistics published by the International Lead and Zinc Research Group show that the global zinc market has a slight surplus in the first months of the year. The January surplus was 1,900 tons, slightly higher than the global 1,800 tons surplus recorded in December 2014. However, the group envisions a tough path for this metal this year.

Zinc on the London Metal Exchange (LME) has been steadily falling from $ 2,400 per tonne to $ 2,000 per tonne since September last year. The strength of the dollar and uncertainty about China's economic growth are weighing heavily on zinc and other metals traded by the LME. LME zinc inventories reportedly dropped significantly during the year.

Australia's largest miner MMG cut zinc production last year. The operator is likely to close his mines. A similar situation with closures elsewhere in the world could lead to supply shortages, which in turn could push zinc prices to higher levels. However, the potential of Chinese factories and mines remains a concern.

Global production of zinc mines recorded 1.8 percent growth in 2014 outside of China, while zinc production declined 0.7 percent, while China showed a 6.5 percent increase in mine production. Refined metal production fell 1 percent globally outside of China, but posted robust growth of 14 percent in China.