Market Fundamentals and the Evolution of Lead and Zinc Supplies

The opening years of the new millennium will be characterised by the closure of many lead and zinc mines because of reserve depletion. However, weak commodity prices through the second half of the 1990s have slowed project evaluation and have made it difficult to raise finances for the development of new mines required to replace lost output and to meet increasing demand for metal in the future. Growth of lead and zinc demand will be determined by the pace of global economic activity, especially in the emerging economies. How rapidly demand grows will have a key bearing on the possible shortfall in mine output and the response of prices to the implied tightening of metal supplies early in the new millennium. These issues are the focus of a discussion of the critical lead and zinc supply developments which will unfold post 2000, taking into account project lead times and the role that recycled metal plays in meeting market demand.