ZINC METAL

The industry is made up of mines where zinc deposits are exploited, the ore is crushed and milled and then the zinc mineral concentrate is generally separated by physical processes. The concentrate is then shipped to an electro-refinery or smelter where the concentrate is roasted and leached and the zinc is recovered by electrowinning.

 

Zinc occurs throughout the world but is particularly associated with carbonate rocks and is commonly found with lead. Mines tend to be small underground operations, with the typical grade of 5% to 8% zinc.

 

Traditionally, Canada, Australia, the USA and Peru have dominated zinc mining however in recent years China has become by far the most important producer having a market share of almost 40% of newly mined zinc. There are few large mines in China and production is dominated by hundreds of small mines. Reliable information on the Chinese zinc mining situation is very hard to obtain.

 

Most concentrate is sold according to an internationally recognised standard formula that pays a fixed proportion of the zinc contained in the concentrate and a treatment fee charged by the smelters on each tonne of concentrate and which is renegotiated annually.

 

The conversion of zinc from concentrate to metal is also dominated by China where there has also been a tremendous growth in capacity in recent years. While the number of electro-refineries and smelters outside China would probably number less than 100, there are over 500 in China. These small operations tend to be inefficient and poorly regulated.

 

While metal production facilities are frequently referred to as smelters, true smelting operations have not provided a significant proportion of metal for a number of years, and production is almost entirely by electro-refining. These plants produce by-product acid, tend to be built for an indefinite life and generally draw on concentrate from several different mining operations. The acid is an important by-product provided it can be sold locally. These facilities tended to be built in industrialised areas, although with rising energy costs new electro-refineries have sought cheap long term power supply.

 

In common with the other major metals, zinc is traded on the London Metals Exchange or LME. The LME provides a guaranteed market for producers. The LME price forms the basis of almost all metal and concentrate pricing contracts, yet ironically very little metal changes hands at the LME price. Physical metal always trades at a premium to the quoted price and the premium will change from place to place, reflecting regional shortages and from time to time as the market swings from surplus to deficit. Generally speaking the premium is in the range US$50 to US$120 per tonne.

 

In order to sell to the LME, metal must meet a certain high standard of quality. Most metal achieves the LME highest quality, Special High Grade containing 99.95% zinc. Metal is produced as 25kg ingots and packaged as one tonne lots.

 

                                                Galvanized Car Body

 

 

A little over half of zinc is used for galvanising, which is the application of a thin coating of zinc on steel. The zinc seals the steel so that corrosion cannot occur. Galvanised items are increasingly common and include car bodies, the outer shell of white goods, street furniture (lamp posts, crash barriers) and many other steel objects that are exposed to the elements.

 

White Goods

 

About 15% of zinc goes into brass where it accounts for 30% of the alloy, together with copper. 

 

 

Due to zinc’s low melting point it can be readily melted and cast into shapes which due to its good strength maintain their shape well, consequently about 15% of zinc is the main constituent in die casting alloys, such as are used for items like carburettors.

 

The fourth most common use of zinc is a chemical, of which by far the most important is zinc oxide. Zinc oxide’s biggest use is as an additive to rubber where it promotes rapid solidification in the vulcanising process. 
It is also used a filler in paints and plastics and in animal feeds and fertilisers.

 

Although one of the smallest uses, zinc is an important constituent of many pharmaceutical products. Its curative powers have been recognised since Roman times when naturally occurring zinc carbonate and zinc oxide were used in an aqueous suspension to treat skin complaints; calamine lotion is still widely used today. More modern applications can be found in skin creams for babies and sun tan lotion where it not only heals burned skin but also cuts out those wavelengths of light that cause skin cancers.   The positive effects and necessity of zinc in our everyday diet is now well recognised.

 

Like all commodities, the zinc price is subject to high prices in times of shortage and low prices when there is over supply. The effect of small imbalances in supply and demand has a disproportionate effect on price. By comparison with other metals, zinc is widely distributed and its ownership is widely held, as a consequence there has rarely been any producer discipline and zinc has tended to under-perform. The graph below illustrates the zinc price over the past 40 years in dollars of the day and in 2008 dollars. The current zinc price can be found by activating the following link to LME.