Zinc Supply/Demand Gap

Low investment in exploration and mine development in the late 1990s and early 2000s (a time when prices were low) has limited the ability of mining companies to expand supply quickly in the current climate of strong demand and high prices. Consequently, zinc consumption is forecast to exceed production again in 2007, leading to a further drawdown in stocks.

In 2008, increased capacity at new and existing mines, providing greater availability of concentrates, is forecast to result in zinc production exceeding consumption (Australian Commodities, Vol 14-2, 2007).

Global zinc stocks, however, are forecast to fall to critically low levels due to exceedingly tight supply-demand balance beyond 2011.