Ivanhoe’s Kipushi zinc mine in the DRC officially reopens
The restart marked exactly a century since the mine first went into production.
BMI has made a downward revision to its average zinc price forecast for 2023.
According to BMI, a unit of Fitch Solutions, the revised forecast now stands at $2,550/tonne, down from the initial projection of $3,000/tonne. The adjustment implies an average price of approximately $2,275/tonne over the period from June to December 2023.
The revision in zinc prices can be attributed to several factors influencing the market. Notably, zinc demand in Mainland China is expected to slow down significantly from June to December 2023 due to government-imposed restrictions on steel production. To achieve the government’s annual target, steel production in the country will need to contract compared to the previous year.
Looking beyond 2023, BMI maintains a negative long-term view on zinc prices and has further revised its average price forecasts. The new forecast anticipates a steeper downtrend, with zinc prices projected to average $2,150/tonne from 2024 to 2027, compared to the previous estimate of $2,500/tonne.
BMI predicts that the global annual zinc market deficit experienced in 2022 will be replaced by a small surplus of 7,000 tonnes in 2023. This shift is due to the recovery in global supply outpacing the rebound in demand. However, the global supply will remain tight in 2023 due to low London Metal Exchange stockpiles, following consecutive annual production deficits in 2021 and 2022.
“There are tentative signs that European smelters could begin increasing production again in 2023,” said BMI.
In February 2023, Nyrstar restarted production at the Auby plant in France, having previously been placed on care and maintenance in 2022 due to high power costs.
In October, Glencore announced the closure of the Nordenham zinc smelter, which was the third major European zinc smelter to be closed over 2021-2022 due to high energy costs.
Despite declining prices over the forecast period, zinc mine production is expected to expand over the next decade gradually. Australia, India, and the United States will be the primary drivers of this output growth, with several projects in the pipeline.
On the other hand, Mainland China and Peru, the two largest zinc mining geographies, are projected to experience weak production growth during the same period.
