Column: Zinc treatment charges jump after 2022 smelter bottleneck – by Andy Home (Reuters – April 12, 2023)

LONDON, April 12 (Reuters) – The zinc market was defined by smelter woes last year with global refined metal production dropping by 4.1% relative to 2021, according to the International Lead and Zinc Study Group (ILZSG).

It was the sharpest fall in world zinc output since 2009, a year of massive disruption caused by the global financial crisis and ensuing collapse in industrial metal prices. Zinc usage was also weak last year, sliding by 3.3% from 2021 levels as China’s construction sector, a major user of the metal in the form of galvanised steel, struggled to regain lost momentum.

But the smelter bottleneck was severe enough to generate a global supply shortfall of more than 300,000 tonnes, according to ILZSG. Will this year be any different?

A sharp rise in the annual benchmark smelter processing fee should incentivise a turnaround in metal production. The scale of the rebound, however, will also depend on structural issues, particularly power availability in Europe and China.

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