Zinc consumption expected to grow at a sluggish pace

World zinc consumption could increase by 2% per year from now until 1990, thanks in large part to the automakers, according to Coopers and Lybrand.

The firm, in a recent Global Mining Outlook, links the increase to the use of more galvanized steel sheets by auto manufacturers.

Also, according to the firm, “the negative impact of substitution and material conservation is expected to recede.”

On the other hand, additional refinery expansion, in industrializing nations such as South Korea, and Thailand, will work against supply diminution.

Coopers and Lybrand foresee zinc prices averaging 35 cents (US) per lb on the London Metal Exchange this year. “Further increases in the real price to 1990 will be moderated by new capacity and the downtrend in zinc production costs,” the firm writes.

For nickel, growth during the next three years will be about 1.5% per year, with slow growth in steel production holding over-all nickel growth back. The level of nickel consumption this year is expected to be stagnant.

Nickel prices could average $1.85 per lb this year, “but surplus capacity and a lack of sustained producer discipline will cause real nickel prices to decline,” the firm writes.

For silver, no real price hikes are foreseen for the near future. (The average price of silver in 1986 was $5.46 per oz.) Current stocks of the metal, combined with silver recovery from scrap, will provide enough material for an increasing industrial demand while inhibiting any prolonged run at a price hike.