Jiangxi Copper Corp. expects global supply to turn to surplus over 2018-2020 due to anticipated growing output, both in China and overseas, the major Chinese zinc producer said in its December report on the sector.
It forecast a global deficit of 210,000 mt in 2017, but said that the market would turn into a surplus of 3,000 mt in 2018, rising to 167,000 mt in 2019 and 340,000 mt in 2020.
Jiangxi Copper estimated China's 2017 mined zinc output at 4 million mt, up 70,000 mt year on year. Output would rise to 4.1 million mt in 2018, 4.25 million mt in 2019 and 4.3 million mt in 2020, it added.
The miner forecast global mined zinc output to hit 7.95 million mt in 2017, rising to 8.44 million mt in 2018, 8.92 million mt in 2019, and 9.14 million mt in 2020.
High refined zinc prices in 2017 attracted miners to hike output, mainly overseas, the miner said. In China, however, stricter environment protection policies hit the commissioning of new zinc mine projects as well as disrupting production at existing mines, it added.
China was planning to add mined zinc output capacity of 240,000 mt/year in 2018, but the environment policies delayed many projects. So China is expected to add just 100,000 mt new mined zinc output capacity in 2018, Jiangxi Copper said.
Though China planned to add 1.08 million mt/year of new zinc smelting capacity over 2018-2020, only 780,000 mt/year of smelting capacity had been confirmed, Jiangxi Copper said in its report.
