616
C. Hassall
Regional Changes in Refined Zinc Output and Demand
The global zinc market has been in deficit since 2012, drawing down inventories
from the high levels accumulated after the global financial crisis of 2008/2009 when
both China and the world excluding China saw substantial annual refined zinc market surpluses. Refined zinc usage globally grew from 8.9 Mt in 2000 to 12.2 Mt in
2019, an increase of 3.3 Mt, but China accounted for more than this total rise, effectively taking away zinc demand from the rest of world. While growth in Chinese
demand supported strong annual average global demand growth through to 2015,
more recently structural changes in Chinese zinc demand and the geographic distribution of demand growth have led to a recovery in zinc consumption in the world
outside China (Fig. 1).
Annual global zinc usage fell by an estimated 1.5–2%—200 kt) between 2015 and
2018 entirely because of a significant downturn in Chinese zinc consumption. The
decline in Chinese usage is structural, but unsurprising, reflecting the maturity now
of the economy. Growth in other Asian countries is a reflection of increased manufacturing competitiveness vis-à-vis China, and growing investment in infrastructure.
China’s share of global zinc demand, therefore, is changing with this increasing
economic maturity and, in the last three years, consumption of zinc in China has
stagnated at best, and in some years has fallen significantly. Higher costs, more
extensive and better enforced environmental regulations, and the effect of trade disputes have constrained the profitability of China’s domestic manufacturing industry,
with some Chinese companies now basing their manufacturing activities off-shore.
With these changes inside China, other countries are now better able to compete in
world markets than was the case in the initial 10–15 years after China’s entry into the
WTO at the end of 2002. Furthermore, the impact of China’s intense focus on fixed
asset investment since 2002, if not before, particularly in relation to the development
-600
-400
-200
0
200
World
China
Asia ex China & Jap
Rest of World
South America
North America
Japan
Europe
Fig. 1 Change in regional zinc demand: Difference between 2015 and 2018 (‘000s tonnes)
C. Hassall
Regional Changes in Refined Zinc Output and Demand
The global zinc market has been in deficit since 2012, drawing down inventories
from the high levels accumulated after the global financial crisis of 2008/2009 when
both China and the world excluding China saw substantial annual refined zinc market surpluses. Refined zinc usage globally grew from 8.9 Mt in 2000 to 12.2 Mt in
2019, an increase of 3.3 Mt, but China accounted for more than this total rise, effectively taking away zinc demand from the rest of world. While growth in Chinese
demand supported strong annual average global demand growth through to 2015,
more recently structural changes in Chinese zinc demand and the geographic distribution of demand growth have led to a recovery in zinc consumption in the world
outside China (Fig. 1).
Annual global zinc usage fell by an estimated 1.5–2%—200 kt) between 2015 and
2018 entirely because of a significant downturn in Chinese zinc consumption. The
decline in Chinese usage is structural, but unsurprising, reflecting the maturity now
of the economy. Growth in other Asian countries is a reflection of increased manufacturing competitiveness vis-à-vis China, and growing investment in infrastructure.
China’s share of global zinc demand, therefore, is changing with this increasing
economic maturity and, in the last three years, consumption of zinc in China has
stagnated at best, and in some years has fallen significantly. Higher costs, more
extensive and better enforced environmental regulations, and the effect of trade disputes have constrained the profitability of China’s domestic manufacturing industry,
with some Chinese companies now basing their manufacturing activities off-shore.
With these changes inside China, other countries are now better able to compete in
world markets than was the case in the initial 10–15 years after China’s entry into the
WTO at the end of 2002. Furthermore, the impact of China’s intense focus on fixed
asset investment since 2002, if not before, particularly in relation to the development
-600
-400
-200
0
200
World
China
Asia ex China & Jap
Rest of World
South America
North America
Japan
Europe
Fig. 1 Change in regional zinc demand: Difference between 2015 and 2018 (‘000s tonnes)