Weekly Metals News Digest – September 2-6
Global Zinc Production Continues to Decline
Global zinc ore production fell by 3.4% in the first half of 2024 due to reduced demand from metallurgical plants, particularly in China. Zinc orders from galvanized steel plants and hot-dip galvanizing operations have also decreased, according to data from the Lead and Zinc Study Group.
China’s zinc concentrate imports for the first seven months of 2024 dropped by 22%, reaching their lowest level since 2019 at 2.1 million tons. Additionally, China’s refined zinc production fell by 2.8%, totaling almost 3.7 million tons.
While China’s production decline was partially offset by increased output in Europe, with Glencore restarting its Nordenham plant in Germany and Nyrstar resuming operations at its Budel plant in the Netherlands, global zinc production has been decreasing for several years. Production dropped by 2.2% in 2022 and 2% in 2023, with further declines expected by the end of 2024.
Despite this, zinc prices are not expected to rise, as the global market has a surplus of 228,000 tons in the first half of 2024, which is unlikely to dissipate soon.
Aurubis Sells Buffalo Mill to Wieland Group
Aurubis, Europe’s largest copper producer, has sold its Buffalo mill in the U.S. to the Wieland Group, continuing its strategy of downsizing its rolling business. The Buffalo mill produces rolled copper products and employs 500 people, but the terms of the deal were not disclosed.
Aurubis has been gradually exiting the rolling business, selling plants in the Netherlands and metal service centers in the UK, Slovakia, and Italy. The company is instead focusing on copper production from primary and secondary raw materials and on extracting precious and non-ferrous metals from industrial waste. Aurubis is also building a new steel plant in the U.S. as part of its long-term strategy.
New Zinc Smelter to Launch in Russia
A new zinc plant is set to open in Russia in 2025, replacing the former Ufaileinickel plant, which closed in 2017. Currently, zinc production in Russia is limited to the Chelyabinsk Zinc Plant, which produces just over 200,000 tons annually. Domestic demand, however, exceeds this amount, requiring the import of around 80,000 tons of zinc from Kazakhstan and Uzbekistan.
The new plant, with an expected capacity of 120,000 tons per year, is being developed by Polymet Engineering, potentially in partnership with Russian Copper Company. Originally scheduled for a 2023 launch, the project has been delayed to 2025. The plant will primarily supply galvanized steel and hot-dip galvanizing facilities, with excess production potentially exported to China, the world’s largest zinc consumer.
Global lithium prices have fallen by more than 20% in 2024, but the rate of decline has begun to slow, offering some optimism to market participants. As of September 2, lithium carbonate prices at the Guangzhou Futures Exchange closed at $10,572 per ton, a slight decrease.
The price drop, which began in 2022, was driven by a surge in lithium supply from major producers like Australia, China, Argentina, and Zimbabwe, while demand, particularly from electric vehicle manufacturers, grew slower than expected. However, as lithium output decreases in several countries, prices are stabilizing. Research agency BMI expects lithium carbonate prices in China to average $15,000 per ton for the year, still below 2022-2023 highs.
Tin Prices Expected to Rise Further
Global tin prices are forecast to continue their upward trend, with research agency BMI revising its 2024 average tin price estimate from $28,000 to $30,000 per ton. By 2033, tin prices could reach $45,000 per ton, more than double the average between 2016 and 2020.
This price increase is due to expected supply shortages, with global tin markets likely to face a deficit starting in 2028. Tin exports from Myanmar's Man Maw mine have been halted since August 2023, affecting supply to Chinese smelters and reducing pure tin exports. Indonesia also saw a 54% drop in tin exports in the first half of 2024 due to delays in government approvals for mining operations.
Lithium Price Rebound May Boost EU Projects
As lithium prices stabilize and are expected to rise, this could accelerate lithium mining projects in the European Union, reducing dependence on Chinese imports. Currently, 97% of the EU’s lithium is sourced from China, a critical material for electric vehicle battery production.
With demand for electric vehicles expected to double in the next decade, the EU plans to launch eight lithium extraction projects by 2030. By 2034, lithium carbonate production in the EU could reach 58,000 tons annually. The price rebound may attract more investment to these projects, boosting the EU’s domestic lithium supply.
