CRU: Korea Zinc Co. Dominates the Lead Market

LONDON, September 21, 2017 /PRNewswire/ --

Korea Zinc (KZ) is now the single most important influence in the lead markets, playing a major role both in the global lead concentrates and refined lead markets.

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Following the completion of an expansion in 2016, its Onsan plant in South Korea, at 0.5Mt/y refined lead capacity, is now the largest smelter in the world by some considerable margin. Moreover, with no integrated mining capacity, all concentrates need to be secured on the global custom market. Onsan also processes scrap materials, while the country boasts a number of dedicated secondary lead producers. In this feature we review recent trends in concentrates, scrap and refined metal trade in this country, as well as looking downstream at trade in automotive batteries.

Concentrate imports slip back in 2017 as tight market bites
Since its start up in the early 1990s, Korea Zinc's Onsan smelter has seen a number of expansions, the latest two occurring in the last ten years, bringing smelting capacity to 430,000t/y and refinery capacity to more than 500,000t/y. As a result, refined lead production has risen steadily, reaching 441,000t in 2016 and requiring an ever increasing supply of primary and secondary feed. Concentrate imports have duly risen steadily, surpassing 600,000 dmt in 2016, with an estimated lead content of around 350,000t. While the smelting complex includes an Ausmelt plant with a throughput capacity of 100,000t/y of secondary materials, the latest expansion is based on primary feed and concentrates now account for around 75% of total feed. Until 2016, this was supported by a well supplied global market for concentrates. Although in that year the availability of Australian concentrates fell as a result of Glencore's mine cutbacks, KZ was able to secure additional tonnages of concentrates from Peru, Bolivia and the USA. South 32's Cannington is also a major supplier of Australian concentrates, while around three-quarters of the Peruvian material is supplied through traders Trafigura and Glencore.

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