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REDUCED NON-FERROUS MARKET RESEARCH 2010-2011
WORLD MARKET OF ALUMINIUM
Classification
Aluminium is defined as unprocessed aluminium (TNVED 7601) in liquid state, in blocks, in ingots, in rolling blocks, slabs, channeled cores, billets for wire production or in similar forms obtained by casting of electrolytic aluminum or by melting of waste scrap or scrap. This products are used mainly for cogging, malleating, drawing, extrusion, press-work or for melting and casting in shaped objects. In this commodity item one should include aluminum pellets, which are mainly used for metallurgy (as desoxidant, especially in the production of ferrous metals. The present survey takes a look at stock metal, in particular unalloyed aluminium (TNVED 760110000).
It is worth to note that bauxites trade, which are the main raw material for aluminium production, is done in accordance with codes TNVED AND ITA of classificators 2606, in which bauxites trade is included (hydrated aluminium oxide, containing different amounts of black iron oxide, silicium and others). This commodity group includes also heat-treated bauxites, which can be used in metallurgy for aluminium production and for other purposes.
Mineral raw materials base
Reserves of main raw materials of aluminium industry – bauxites, are rather limited. There are about 7 bauxite fields in the world, which altogether contain 28 billions of tonnes of bauxites. Main deposits of west and central Africa are in Guinea, which amounts 26% of world reserves. Major countries in reserves are also Australia – 19%, Brazil – 12%, Vietnam – 7%, and Jamaica – 7%.
Main deposits of high quality bauxites with the content of aluminium oxides of not less than 50% are divided between the major participants of the industry. The most significant reserves of bauxites belong to United company “Russian aluminium” (OK “RUSAL”, in the amount of 3,3 billions of tonnes, and to Rio Tinto (3,29 billion tonnes) and to CVRD (2,73 billion tonnes). Chinese company Chalco takes the fourth place with the total reserves of 1,92 billion tonnes, Alcoa and Alcan control the reserves of 1,89 and 0,38 billion tonnes correspondingly. The limitation of the raw materials is one of the factors which determines the main tendency of the world aluminium industry development – its consolidation. In 2007 there was a deal of consortium of RUSAL, SUAL and Glencore’s aluminious assets. Rio Tinto merged Canadian Alcan, which in its term in 2004 merged French aluminium producer Pechiney. Chinese aluminium industry is also in the situation of changes: about 100 smaller producers will amalgamate or will become a part of Chalco.
World extraction of bauxites
World extraction of bauxites in 2010 increased by 6,1% to 211 million tonnes. It can be noted that every year there is an extraction of the amount of up to 1% of bauxite reserves, found in crust of Earth. If the level of extraction will keep increasing by the present rates and the volume of the revealed reserves will stay at the same level, then the reserves of earth bauxites will be outspent in about 80-100 years. Among the countries, the major producers of this raw material it is worth to mention Australia with the share of 33,2% of the world extraction. Major extractive countries are also China – 19%, Brazil – 15,2%, India – 8,5%, Guinea – 8,2%, Jamaica – 4,4% out of the world extraction. In 2008 Surinam reduced the extraction by 8% to 4,5 million tonnes and Greece – by 1% to 2,2 million tonnes.
It is worth to note that one of the biggest countries which extracts bauxites is China and it extracts 4,6% of its proven reserves every year. Thus if China has the same level of extraction, its reserves will be outspent in 20 years already.
It is also worth to note that with the current world rate of bauxites extraction (211 million tonnes per year), proven reserves will be outspent in 114 and with the tendency of increase in the rate of world extraction by 5% every year, the reserves will be outspent in 38-40 years till 2050.
Production of aluminium oxide
Production of aluminium oxide in 2010 in the world increased to 85 million of tonnes. It is worth to note that the increase occurred practically in all the companies, decrease of production became not significant.
Aluminium production countrywise
In 2010 aluminium production increased to 41 million tonnes. The biggest producer is still China with the share of production in total volumes of 40,6%. Russia takes 9,3% in the world production.
Aluminium production with the world companies
The major world producers of aluminium are ALUMINUM CORPORATION OF CHINA LTD with the share of the market 10,8% RUSAL with the share of 9,8%, RIO TINTO with the share of 9,2%, ALCOA with the share of 8,7%, NORSK NYDRO ASA with the share of 3,4%, DUBAI ALUMINUM with the share 3,4% and BHP-Billiton with the share of 3,0%.
Trade
World trade of ores and aluminium concentrates
The volume of the world aluminium ores and concentrates in 2010 regarding import amounted about 56 million tonnes. It is worth to note that the world import in volume terms is higher than the world export volume due to the different models of calculation in different countries concerning export and import, and different figures of import and export and excess of these figures over production can give evidence of realization of this metal from reserves.
The world export (export from the countries) of aluminium ores and concentrates in 2010 amounted about 65 million tonnes. It is worth to note that the main customer of foreign ores and concentrates is China, which has the share of import 54%. After it come USA with the share of 13%, Ireland with the share of 7% and Spain – 6%.
The world aluminium trade
The volume of import of unalloyed, not processed aluminium in 2010 was 9,6 million tonnes. The export volume from the world countries amounted 8,4 million tonnes. The main country which imports not processed aluminium is USA -24% out of all world import. After that comes China with the share of 16%, Japan – 13% and Singapore 8%. Russia also imports some amount of aluminium -29 thousand tonnes. But Russia is the major aluminium exporter on the world market with the share of 39% in the world export. After Russia comes Australia with the export share of 15%, Iceland – 9% and Brazil – 8%.
Calculation of consumption and market balance and forecast till 2012.
Annual dynamic of aluminium consumption and production in 2010 showed rather significant increase in both figures. In 2010 the production increased to 41400 thousand tonnes and consumption increased to 39381 thousand tonnes. In 2009 aluminium surplus on the world market increased more than by 4 times. In 2010 the market balance didn’t change significantly but it increased to 2019 thousand tonnes. According to preliminary estimation of analysts METALRESEARCH in 2011 surplus will decrease to 654 thousand tonnes and according to the forecasts in 2012 it will increase again to 1095 thousand tonnes.
The price on aluminium on LME for 2009 decreased by 36% to the average annual value of 1664 $/tonne. In 2010 the price on aluminium on LME increased to 2138 $/tonne. According to the preliminary estimation of the analysts METALRESEARCH in 2011 the price on aluminium will increase insignificantly to 2265 $/tonne and according to the forecasts in 2012 it will again decrease to the level of 2010.
Prices analysis and forecast to 2014
Stock prices had positive reaction on the report Alcoa concerning it profit in the 3rd quarter of 2010 and positive forecasts for aluminium. Some experts suppose that the price increase on aluminium will outgo positive dynamic of copper as low interest rates and low risks of aluminium possession make it ideal material for hedging. Lately the increase in interest to aluminium could be seen on the part of financial funds, which compete successfully in trading. Aluminium reserves on LME stock exceed 4,5 million tonnes and at that only 1-1,5 million tonnes is available for customers and the rest volume has been bought by long-term investors. Real demand is recovering faster than it was forecasted, and the surplus on the market is reducing. American service centers and Japanese trading companies inform about extremely low reserves: stock reserves in Japan in September reduced to the minimum for the last 14 years. Metal is actively bought by automakers and equipment producers. About 59% of the enterprises, which production capacities were stopped last year (mainly in China), have already started working, whereas in developed countries only 11% of enterprises have reconstructed the production of the metal.
RUSSIAN MARKET OF ALUMINIUM
Production
Russia is the only country in the world where not only bauxites but also nepheline ores are used for aluminium production and 40% of Russian metal is produced from them. Russia produces about 10% of primary aluminium produced in the world and takes the second place for this figure after China. In 2010 the production of primary aluminium in Russia increased insignificantly compared to the previous year and amounted 3,8 million tonnes.
More than 80% of primary aluminium is produced in Siberia by Bratskiy, Krasnoyarskiy, Irkutskiy, Sayanskiy, Hakasskiy and Novokuznetskiy plants, where cheap sources of energy can be used, because it is the main part of expenses for aluminium production.
Major vertically integrated United company “Russian aluminium” (United Company Rusal – UK Rusal), which was set up in April 2007 by amalgamation of Russian companies “SUAL” and “Rusal”, has almost all bauxite ores and all aluminous and aluminium plants in Russia and also the company has enterprises of bauxites extraction, aluminous and aluminium plants in Ukraine, Rumania, Guinea, Guyana, Australia, Nigeria; beside this the company owns bauxite-aluminous-aluminium assets of Swiss company Glencore International AG on Jamaica, in Ireland, Italy and Sweden.
Beside this UK Rusal, in aluminium industry in Russia there are two more companies: independent OJSC “Severo-Onejskiy bauxite mine”, extracting bauxites of Iksin mine in Arkhangelskaya oblast and OJSC “Apatit”, which produces nepheline concentrates as by-product component in the production of apatite concentrate and delivers it to aluminous plants of the company UK Rusal. OJSC “Apatite” is included in holding OJSC “Fosagro”.
Trade
Export of unprocessed, unalloyed aluminium in 2010 increased by 5% to 3,5 million tonnes. Import for the same period decreased by 6% and amounted 27 thousand tonnes. Main recipient of Russian aluminium is USA, where in 2010 32,6% of aluminium was exported. Main companies which export Russian aluminium are OJSC “RUSAL BRATSKIY ALUMINIUM PLANT” – 28,8%, OJSC “SUAL” – 23,4%, OJSC “RUSAL KRASNOYARSKIY ALUMINIUM PLANT” – 21,7% AND OJSC “RUSAL SAYANOGORSKIY ALUMINIUM PLANT” – 20,1%.
According to the calculation, only about 10,6% of produced aluminium is consumed in Russia. 0,7% more is imported. It is worth to note that estimated consumption of aluminium in Russia reduced by 23% in 2010 and reached the level of 409,3 thousand tonnes. According to preliminary estimation of analysts METALRESEARCH in 2011 estimated consumption of aluminium will increase to 548,6 thousand tonnes.
Price analysis and forecast to 2014
It is worth to note that average export Russian price on unprocessed, unalloyed aluminium in 2009 was 1499 $/tonne whereas import price was 1521 $/tonne, and price of LME was 1664 $/tonne. In 2010 export price increased by 22% to 1827 $/tonne, and import price increased by 36% to 2066 $/tonne, at that the price of LME was 2138 $/tonne. According to preliminary estimation of analysts METALRESEARCH in 2011 Russian export and import prices increase by 6%.
WORLD MARKET OF COPPER
Classification
Copper is defined in the present analysis as unprocessed refined copper (TNVED 74031). In particular: cathodes and cathodes sections (TNVED 7403110000), wire bars (TNVED 7403120000), rolling billets (TNVED 7403130000) and other (TNVED 7403190000).
Refined copper which contains not less than 99,85 mass % of copper is obtained by electrolytic refinement, electrolysis, chemical cleaning or by fire oxidating refining. Refined copper is cast in ingots or copper bars for melting (for example, for alloy obtaining) or in work material for wire production, in slabs for rolling, in billets (including stock material with circular cross section) and analogical forms for cogging, extrusion, drawing or malleating in slab material, plates, leaves, wire, pipes and others. Electrolytically refined copper sometimes have the form of cathodes, which consist of plates or leaves with two eyes, hooks which are used for hanging original leaves in electrolytic bath, ore for cutting into sections. Refined copper can also have the form of spherical particles, mainly used for alloying and sometimes for grinding into powder. But copper powders and flakes are related to the production obtained from copper.
Mineral raw materials base
Total copper reserves in the world according to USGS on the 1st January 2011 are 635 million of tonnes. The structure of copper reserves in terms of countries is the following. The first place is taken by Chili with the share of about 23,6% of the world reserves, the second place is taken by Peru with 14,2%, the third place is taken by Australia with the share of 12,6%, the fourth place is taken by Mexico with the share of 6%, the fifth place is taken by USA with 5,5%, the sixth – China with 4,7%, the seventh – Indonesia with the share of 4,7%. Russia has the eight place with the share of less than 4,7%.
World extraction of copper
World extraction of copper in 2010 increased by 2% to 16,1 million of tonnes. The biggest copper extracting country is Chili, the share of which in the world figures was 34,1% in 2010. The second place belongs to Peru with the share of 7,9%, the third place – China 7,1%. It is worth to note that there has already been increase in copper extraction regarding the countries mentioned above. But USA decreased copper extraction by 5% to 1120 thousand tonnes. Russia has eighth position in the world figures with the share in total figures of 4,9%. The most significant increase in the extraction for 2010 was made by China – by 16% to 1150 thousand tonnes. The most significant decrease in the extraction was in Indonesia – by 16% to 840 thousand tonnes.
Production of refined copper
Production of refined copper in 2010 increased by 3% to the level of 19,1 million tonnes. The leaders companies are FREEPORT-MCMORAN with the share in production volume of 8%, CODELCO with the share of 7%, AURUBIS with the share of 4% and XSTRATA with the share of 4% in the world production volumes. OJSC “Norilskiy nickel” and OJSC “Uralelectromed” have in total 2%. CJSC “KMEZ” – 1%. It is worth to note that OJSC “Mining and metallurgical integrated works Norilskiy nickel” decreased copper production by 9% to 365 thousand tonnes. OJSC “Uralelectromed” and CJSC “KMEZ” on the contrary increased copper production.
Trade
World trade of copper ores and concentrates
World import of copper ores and concentrates in 2010 was 21,9 million tonnes. The structure of import includes two main countries-customers: China with the share of import 30% in total volumes and Japan with the share of import 24%. It is worth to note that export of copper ores and concentrates is higher than import and amounts 25,3 million tonnes. The main suppliers of copper ores and concentrates on the world market are Chili with the share of export 28% in total volumes and Peru with the share of export 24%.
World trade of refined copper
The volume of the trade of the world refined copper in terms of import in 2008 amounted about 52,7 billion dollars. The world import of refined copper (copper cathodes and cathodes sections) in 2009 amounted 8,5 million tonnes. The main importer of copper is China, which buys on the world market almost a half of the volume of refined copper. Russia imports rather small amount of refined copper – less than 1%.
The world export of refined copper in 2009 was 9,2 million tonnes. The main exporters were Chili – 37% and Japan – 7%. Russia has the third place in copper export with the figure of 5% in the world figures in 2009.
Calculation of consumption and market balance, forecast till 2012
Annual dynamic of production and consumption of copper in 2010 showed rather significant increase of both figures. In 2010 the production increased to 19131 thousand tonnes and the consumption increased to 19365 thousand tonnes. In 2009 copper surplus on the world market increased to 398 thousand tonnes. In 2010 the market balance became deficit and decreased to 234 thousand tonnes. According to preliminary estimation of analysts METALRESEARCH in 2011 the copper deficit will increase to 325 thousand tonnes and according to forecasts in 2012 it will increase again to 390 thousand tonnes.
Price on copper on LME for 2009 decreased by 26% to average annual figure 5149 $/tonne. In 2010 the price on copper on LME increased to 7497 $/tonne. According to preliminary estimation of analysts METALRESEARCH in 2011 the price on aluminium will increase to 8425 $/tonnes and according to forecasts in 2012 it will increase again to 9075 $/tonne.
Price analysis and forecast to 2014
Analysts suppose this metal to be the most perspective, in nearest several years the prices on it will be high against the background of demand increase and the limitation of the world supplies. The specialists are worried about the quality loss of ores and the problems with the extraction of raw materials. According to their forecasts in 2010 the load of capacities of copper-smelting plants will be not high than 90% because of deficit in offers of copper ore.
In October 2009 the prices on metal were supported by perspectives of copper shortage due to social disorders – output of more than 20% is under the threat of stoppage because of the problems in the complex Olympic Dam (BHP Billiton). Traditionally the market starts being concerned about copper shortage, without paying attention to high volume of stock resources, which reached it maximum from May 2009.
On real market there is not any shortage of the metal, which is supported by low over spots. One more fact has become a surprise for the market – statistics of Chinese copper import: in September the country imported 400 thousand tonnes of the metal, which is 23% higher than the corresponding figure in August. Stock market considered this fact as the signal of continuing growth of copper consumption in PRC with its big plans of infrastructure construction including buildings and power supply, which requires big amounts of red metal. Due to this news and increased activity of funds, the price on copper increased to the highest point beginning from September 2008.
In the 1st half of 2010 the prices on base metals including copper demonstrated volatility but the prices got support from the part of high consumer activity in China and replenishment of the stocks in the countries OECD, where the reserves mostly were at their historical minimum. Measures for economy stimulation, taken as in developed countries and also in developing countries, in whole have increased consumption. Investment demand was also high. According to analysts Economist Intelligence Unit (EIU) in 2011 China will remain the main source of demand. The company is expecting decrease in growth rate of demand in this country, which will be the result of the Government efforts in talking the market down (in particular). Beside this, the period of replenishment of most raw materials has almost been completed to the present time. EIU supposes that it will be difficult for prices to grow further from the current level unless some metal (e.g. copper or tin) will be able to show exceptional deficit or negative dynamic of supplies.
In longer-term period the analysts of EIU expect the growth of prices on main metals in answer to high rates of economy growth in developing countries, current urbanization, and also volatility of forecast related to supplies of many metals. The production on mining plant can have negative influence of cold weather, irregularity of electric power, transport problems, activity of labor unions or negative normative environment.
RUSSIAN MARKET OF COPPER
Mineral-raw material base
Forecast resources of copper in the Russian Federation are significant and estimated as 45,8 million tonnes which is 53,3% of balance reserves. The most significant resources are located on the South and Middle Ural and in Krasnoyarskiy krai.
Russian subsoils have a big amount of copper – 85,8 million tonnes: beside this, in technogeneous objects there are 132 thousand tonnes of copper. Balance reserves are located mainly in Norilskiy ore region (Krasnoyarskiy krai), in Chitinskaya oblast, and also on the Middle and Southern Ural.
About 43% of Russian reserves of copper are located in sulfide copper-nickel deposits of Krasnoyarskiy krai and Murmanskaya oblast. There are more than 22% of reserves in the deposits of copper-sulfur type (Southern and Middle Ural). The only stratiform Udokanskoe deposit (cuprous sandstones), located in Chitinskaya oblast, has more than 23% of balance reserves. In terms of copper content in ores Russian deposits are congruent to foreign analogs and often beside copper they contain such valuable components as nickel, cobalt, platinoids, gold, silver, zinc etc.
Production
Russia takes the seventh place in the world in extraction of copper ores, providing annually about 4,8% of mining production of the world. In 2010 there was extracted about 769 thousand tonnes of copper in concentrates. About 40% of copper was extracted on the deposits of Norilskiy ore region (Taymirskiy municipal okrug of Krasnoyarskiy krai).
40% of Russian copper is extracted by vertically integrated company OJSC “Norilskiy nickel” in Norilskiy ore region (Krasnoyarskiy krai) and in Murmanskaya oblast; 41% of the extraction is implemented by subsidiary companies of the holding OJSC “Ural mining and smelting company” (UMMC) on the deposits of the Middle and Southern Ural; the share of CJSC “Russian copper company” (RCC), subsidiary companies of which develop small South-Ural deposits, is 19% of Russian extraction.
Copper ores beneficiation is fulfilled directly on mining plants; the part of rich copper ores with the nickel part more than 1,5% is sent to melting without beneficiation.
Trade
Russia exports significant amount of copper compared to import. In 2010 copper import to Russia decreased almost by 100% to 0,037 thousand tonnes, and export decreased by 7% to 461,8 thousand tonnes.
For the last 3 years the supplies of the metals abroad are fulfilled by companies OJSC “Norilskiy nickel” – 53% and OJSC “Uralelectromed” – 25%. CJSC “KISHTIMSKIY MEDELECTROLIZNIY PLANT” exports 12% out of total volumes, CJSC “Russian copper company” exports only 4% out of total volumes.
Apparent consumption
In Russian it is consumed about a half of the produced copper. In 2010 production increased by 6% to 905,5 thousand and import decreased by 100%. Copper consumption increased by 23% to 443,7 thousand tonnes. According to preliminary estimation of the analysts METALRESEARCH in 2011 estimated consumption of aluminium will increase to 554,7 thousand tonnes.
Prices analysis
In 2009 import price decreased by 31,6% to 5753 $/tonne, and export price decreased by 21% to 4931 $/tonne, at that the price on LME was 5149 $/tonne. It is worth to note that average export price on copper in 2010 in Russia was 6956 $/tonne whilst due to absence of enough quantity for defining the price on import, there isn’t import price, at that the price on LME was 7308 $/tonne. According to preliminary estimation of analysts METALRESEARCH in 2011 Russian export prices will increase by 14%
WORLD MARKET OF LEAD
Lead is defined in the present survey as unprocessed lead (TNVED 7801). This commodity item includes unprocessed lead with different extent of purification: beginning from impure crude metal or containing silver of lead and ending by lead that is electrolytically refined, but the present survey takes a look at unprocessed refined lead (TNVED 7801100000). It can be in a form of blocks, ingots, blanks, slabs, briquettes or in other analogical forms or in a form of cast core. Most of these types are used for drawing or extrusion, for alloys production or for shaped castings. This commodity item doesn’t include lead powders or flakes.
Mineral raw material base
World reserves of lead-zinc ores are mainly located in 6 countries, in particular, Australia – 33,8%, China – 16,3% of the world reserves, Russia – 11,5%, USA – 8,8%, Peru – 7,5% and Mexico – 6% of the world reserves.
Lead extraction in the world in 2010 increased by 6% to 4,1 million tonnes. Main country extracting lead is still China, which increased the extraction by 9% to 1,7 million tonnes. There was rather significant increase in lead extraction in Australia, Mexico and Russia. There was noticeable decrease in extraction in Peru, Canada, Ireland and Poland.
Production of refined lead
It is worth to note that in the world refined lead is produced much more than it is extracted, as lead waste in most countries are used for further processing. Thus lead extraction makes only 45% of its production. Beside this, lead production is not ecologically safe. Among major companies which produce primary lead in the world in 2010 should be noted BHP with the share 6,3% in the world production, XSTRATA with the share of 2,7% and KOREA ZINC COMPANY LTD with the share of 2,4%. There are also many Chinese plants, data publication of which deserve to be in separate report, among Russian enterprises on lead production one should mention OJSC “Electrozinc”, with the share in the world volumes o,2%.
Trade
World trade of lead ores and lead concentrates
The volume of the world trade of lead ores and concentrates in terms of import amounts about 2,6 million tonnes. World import of lead ores and lead concentrates in 2010 in volume terms decreased by 6%. Main countries, which import lead ores and concentrates were China with the share 57%, Korea with the share of 9% and Germany with the share in total volume of import – 8%.
World export of lead ores and concentrates in 2010 increased by 24% and amounts 3,1 million tonnes. Among main countries exporters are Peru with the share in total volumes 30%, Australia – 15%, and also USA – 11%, Russia – 7% in total export volumes.
World trade of refined lead
The volume of world trade of refined lead in terms of import in monetary terms in 2010 increased by 12% and amounts about 3 billion dollars. The world import of lead in volume terms in 2010 decreased by 9% to 1,4 million tonnes. There are many countries-importers. Among main countries-importers there are – Korea with the import share of 10%, USA – with import share 9%, India – 7%, Spain – 7% and others. Russia takes rather low position in import, therewith, Russia decreased import by 10% to 2957 tonnes.
The volume of the world export in 2010 decreased by 12% to 1,4 million tonnes. There are many countries which export refined lead. Main countries with the volume share of more than 6% in 2010 were Germany, Australia, Canada, Great Britain, Mexico, and Belgium. Russia takes the 10th place in the volumes of the world export with the share of 4%.
Calculation of consumption and market balance, forecast till 2012
Annual dynamic of production and consumption of lead in 2010 showed rather significant increase in both figures. In 2010 lead production increased to 9408 thousand tonnes, and consumption increased to 9365 thousand tonnes. In 2009 lead surplus on the world market increased to 188 thousand tonnes. In 2010 the surplus decreased to 43 thousand tonnes. According to preliminary estimation of analysts METALRESEARCH in 2011 the market balance will become deficit to 38 thousand tonnes, and according to the forecasts, in 2012 the deficit will increase to 130 thousand tonnes.
The price on lead on LME for 2009 decreased by 17,8% to average annual value of 1721 $/tonne. In 2010 the price on lead on LME increased to 2163 $/tonne. According to preliminary estimation of analysts METALRESEARCH in 2011 the price on lead will increase to 2638 $/tonne and according to the forecasts in 2012 it will increase again to 3050 $/tonne.
Prices analysis
Market concern about dramatic reduction of the production in PRC due to the stoppage of a number of enterprises because of ecological reasons, didn’t prove to be correct: in September 2009 Chinese lead production decreased only by 6% compared to August 2009 and increased by 8% compared to the figures of September 2008. On the world market during 8 months the surplus amounts 57000 tonnes.
Japanese Toho Zinc Co informed about the plans for extension of lead production by 8,6% in the 2nd half of 2009. The company sees the perspective of demand growth from the part of automobile production industry. Their forecasts proved to be correct by statistics: in September automobile sales in PRC increased by 84% (the share of autoaccumulators producers is 71% of lead consumption in the world).
As a result of 2009, the demand on lead in China increased by 25%, and in developed countries the reduction of demand was: in USA by 5% compared to the previous year, in Europe – by 15,6% to the lowest level for the last 50 years. In ILZSG suggest that the surplus of Chinese demand will compensate the reduction of consumption in the rest of regions and worldwide demand in 2009 will grow by 3%. The production will increase a little bit more – by 3,4%.
There isn’t common expert opinion concerning market development in the nearest time, everything will depend on the rates of the recovering of the world economy. The representatives of the company Doe Run Co are waiting for the increase in lead orders for batteries close to winter season but they are not sure that the demand will increase so that it will help to start again the work of the capacities stopped earlier.
World market forecast
According to the forecast in 2010 there is going to be increase in lead production by 6,2% and the increase in consumption by 8,3%. Thus market balance of the world lead market in 2010 will have insignificant surplus in the amount of 23 thousand tonnes. In 2011 there is going to be deficit to 60 thousand tonnes, and in 2012 to 130 thousand tonnes. It is worth to note also that in spite of deficit forming to the end of 2010 the price on lead to the beginning of 2011 on LME according to the forecasts is not going to exceed the level of 2nd quarter 2010.
RUSSIAN MARKET OF LEAD
Mineral raw material base
Forecasted resources of lead in Russia are not big, about 1 million tonnes or 1% of the world resources. The most proven part – resources of category P1 amounts in total about 14%. The main part of the resources is forecasted on the territory of Krasnoyarskiy krai, Altayskiy krai and Primorskiy krai and island New Earth (Arkhangelskaya oblast).
The quantity of balance reserves of lead in Russia is almost 20 million tonnes; the country takes the 2nd place in terms of this value in the world after Australia.
About 70% of lead is located in 3 biggest deposits: Gorevskoe in Krasnoyarskiy krai, which has almost 44% of proven reserves of Russia, Ozernoe and Holodninskoe in the Republic Buryatia.
Russian lead deposits as a rule are complex (lead-zinc). The ores of the biggest in the country “stratiform” Gorevskoe deposit is characterized by very high content of lead (more than 7%) and low content of zinc. Only in Australia there are big lead deposits with richer ores, such as Broken Hill (8,5 of lead in ores), Hilton (7,3%) and Cunnington (10,7%), but all of them relate to pyrite-complex industrial type. The main part of reserves of Gorevskoe deposit is located under stream canal of river Angara.
The ores of 2 major pyrite-complex objects - Holodninskoe and Ozernoe deposits- have lead content on average of 0,6% and 1,17% correspondingly.
Production
Lead industry of Russia consists of a number of big producers, a number of small industries and production lines on processing of secondary raw materials on accumulator plants. Due to such variety there are not reliable figures of volumes of lead production, which makes it difficult to analyze the state and the dynamic of internal market. In the statistics of Rosstat on lead production in RF there are only comparative figures: index of lead production in 2008 amounted 85%, in 2009 – 91,2%. As a whole, in 2010 lead production in Russia increased by 6,8% to 113 thousand tonnes.
Trade
Lead import in terms of countries senders and companies-receivers
Refined lead is practically not imported to Russia. In 2010 lead import decreased by 10% to 2,9 thousand tonnes of lead. Lead export from Russia in 2010 increased by 22% and reached 63,8 thousand tonnes. It is worth to note that the main exporters of lead from Russia are OJSC “Electrozinc” with the share in export 31%, CJSC “METKOM GROUP” with the share of export 12%, LLC “PP META 5” with the share in export 12% and LLC “KRIPTUS TRADE” with the share in export 12%. Russian lead is mainly supplied to Turkey 29% and Ukraine 16%, Switzerland 15%. It is also worth to note that there has been export from Russia of lead ores and concentrates in rather significant volumes, the volume level of which in 2010 increased by 81% to 235 thousand tonnes.
Export of countries senders and countries-receivers
Apparent consumption
Production of refined lead in Russia in 2010 increased by 10% to 62,9 thousand tonnes. Import increased by more than 100% to 8 thousand tonnes. Export increased by 12% to 58,6 thousand tonnes. In this way apparent consumption of lead in Russia increased by 10% to 62,9 thousand tonnes.
Prices analysis
It is worth to note that average export price on lead in Russia in 2009 was 1664 $/tonne, at the same time import price amounted 2101 $/tonne, at that the price on LME amounted 1721 $/tonne. In 2010 export price increased by 19% to 1988 $/tonne and imported price decreased by 11% to 1861 $/tonne, at that the price on LME was 2163 $/tonne. According to preliminary estimation of analysts METALRESEARCH in 2011 Russian export and import prices will increase by 24-22%.
WORLD MARKET OF NICKEL
Classification
Unprocessed nickel (TNVED 7502) has a form of ingots, bars, pellets, plates, cubes, granules, briquettes, spherical particles, cathodes or other electrodeposited forms. These primary forms are mainly used as alloy addition in obtaining of alloyed steels and alloys of nonferrous metals and in production of some chemicals. Some forms are used in titanium baskets for application of nickel coat or for nickel powder obtaining. The present survey takes a look at unprocessed unalloyed nickel (TNVED 7503100000)
Mineral raw material base
Reserves of nickel for January 2011 according to USGS were 76,1 million tonnes. The main nickel reserves are located in Australia, which as a result of 2010 took the first place with 31,5% in summary total. Brazil is on the second place with the share of 11,4%. The rest countries have less than 10% of reserves in total quantity. Russia has the fourth place in terms of the reserves with 7,9% in the world reserves of nickel.
World nickel extraction
World nickel extraction in 2010 increased by 11% to 1,5 million tonnes. In spite of huge reserves of nickel in Australia, the main country, which extracts nickel from subsoils, is Russia, which extracts 18% of the world volume. It is also worth to note that Russia increased nickel extraction in 2010 by 3% to 276,3 thousand tonnes. The most significant volumes of extraction belong to Indonesia – 15%, Philippines -10%, Canada – 10%. The countries mentioned above have mainly increase in nickel extraction and 3 countries decreased nickel extraction: Australia, China, and Columbia. New Caledonia significantly increased the extraction – by 49% to 138 thousand tonnes.
Nickel production
The volume of the world nickel trade in terms of import in 2010 in monetary terms increased by 52% and amounted about 14,1 billion dollars. The world import of nickel in 2010 in volume terms increased by 6% and amounted 680,8 thousand tonnes. The main countries, importing nickel in 2010, were China with the share of import 27%, USA with the share of import 17% and Germany with the share of import 10% in the world values.
The volume of nickel, which was exported in 2010, increased in volume terms by 3% to 615 thousand tonnes. The main countries-exporters of nickel are Russia with the share of export 35%, Norway with the share of export 15% and Canada with the share of 12% in the world values.
Calculation of consumption and market balance and forecast till 2012.
Annual dynamic of production and consumption of nickel in 2010 showed insignificant increase of both values. In 2010 the production increased to 1425 thousand tonnes and the consumption increased to 1437 thousand tonnes. In 2009 nickel surplus on the world market decreased to 70 thousand tonnes. In 2010 the market balance changed to deficit to 12 thousand tonnes. According to preliminary estimation of analysts METALRESEARCH in 2011 the market balance will grow to surplus to 5 thousand tonnes and according to the forecasts in 2012 it will change to deficit to 6 thousand tonnes.
The price on nickel on LME for 2009 decreased by 30,6% to average annual value of 14649 $/tonne. In 2010 the price on nickel on LME increased to 21904 $/tonne. According to preliminary estimation of analysts METALRESEARCH in 2011 the price on nickel will increase to 23925 $/tonne and according to the forecasts in 2012 it will grow again to 24750 $/tonne.
Price analysis and forecast till 2014
From the beginning of 2009 the price on nickel increased by 63% which is caused by several factors, including difficult situation with supplies, growth of its purchase by invest funds and the optimism of expert regarding perspective of the metal. Specialists are waiting for nickel deficit: reduction of the production and delays of realization of planned projects led to decrease in offers on the market, at that the production of stainless steel will grow. In 2010 consumers can receive 200 thousand tonnes of nickel less due to forced limitation of the production, strikes (including on nickel enterprises Vale Inco) and regular delays of terms of projects launching.
Although the level of reserves on LME is at the highest level beginning from 1995, traders are waiting for their reduction as the biggest market participant “Norilskiy nickel” in October dramatically reduced supplies, compared to January-August when the volume of supplies was increasing permanently. Nickel production in Russia for 8 months of 2009 decreased by 6% compared to the same period of the last year. The management of Anglo American is waiting for the improvement in demand on metal, thanks to expected replenishment of steel reserves in the countries of OECD. In the second quarter there began the recovery of stainless steel production in China, South Korea and Taiwan. Europe and USA still stay behind.
Expert average quarter forecast of the price on nickel says about its increase to 24196 thousand/tonnes in 2011 and stabilization during 2012-2014 at the level from 24000 $/tonne.
RUSSIAN MARKET OF NICKEL
Production
Nickel production in Russia in 2010 increased by 3,1% to 276,3 thousand tonnes. About 5 companies produce nickel in Russia. The leader among them in terms of volumes is OJSC “Norilskiy nickel”, which had 85,2% in total production values in 2010, having increased the production by 1,1% to 235,5 thousand tonnes. It is worth to note that in 2010 all companies increased nickel production except OJSC “Rejnickel”, which reduced nickel production by 5,6% to 11,1 thousand tonnes. OJSC “Ufalejnickel” increased its production by rather high rates – by 59,4% to 10,2 thousand tonnes.
Trade
Russian trade of nickel in 2010 decreased by 12% to 627,1 tonnes. The main importers of nickel to Russia were the Netherlands. The main customers of Russian nickel in 2009 were the Netherlands – 87% and Latvia – 12%. Main sender of nickel from Russia was OJSC “NORILSKIY NICKEL”.
Export of nickel in terms of companies senders and countries-receivers
Apparent consumption
In Russia there is a consumption of about 62% of the nickel produced. In 2010 the production of nickel increased to 276,3 thousand tonnes, import decreased by 12,1 % to 627 tonnes, and export decreased by 4,7% to 215,1 thousand tonnes. Nickel consumption increased by 44% to 61,7 thousand tonnes. According to preliminary estimation of analysts METALRESEARCH in 2011 estimated nickel consumption will decrease to 58,7 thousand tonnes.
Prices analysis
It is worth to note that average export price on nickel in Russia in 2009 amounted 14727 $/tonne, whereas import price amounted 14679 $/tonne, at that the price on LME amounted 14649 $/tonne. In 2010 export price increased by 44% to 21250 $/tonne, and import price increased by 21% to 17742 $/tonne, at that the price on LME amounted 21904 $/tonne. According to preliminary estimation of analysts METALRESEARCH in 2011 Russian export and import prices will increase by 9%.
WORLD MARKET OF TIN
Classification
This commodity item in the present survey includes unprocessed unalloyed tin (TNVED 8001100000) in blocks, ingots, slabs, bars, cores or in analogical forms and also in scraps, pellets or analogical products from tin. Most products, included in this commodity item, are used for production of tin-plate, for cogging or extrusion, for alloys obtaining or for casting.
Mineral-raw material base
Tin reserves on the earth are insignificant and amount about 5,2 million tonnes. Major tin reserves belong to China -28,8% in the world ones. Rather significant tin reserves are located in Indonesia – 15,4%, Peru-13,7%, Brazil – 11,3%,Bolivia -7,7% and Russia -6,7% in the world reserves of tin on January 2011.
Tin extraction in 2010 increased by 0,4% to 261 thousand tonnes. Tin extraction in the world is carried out by the countries, which has its major reserves. In 2010 the biggest countries traditionally become China with extraction of 44,1% in the world volumes, Indonesia -23% and Peru 14,6% in the world extraction volume. Russia has rather low place in the values of the world tin extraction volumes, having decreased tin extraction to 16,7%.
Tin production
World production of refined tin in 2010 decreased by 0,3% to 333 thousand tonnes. The biggest company of refined tin production is YUNNAN TIN, which has 17,8% in total volume of production in 2010, PT TIMAH is on the second place with the share of 11,7% in the world values. The third place is taken by MALASIA SMELTING CORP -11,6%, according to the results MINSUR in 2010 has the fourth place with the share of 10,8% in total world production.
Trade
World trade of tin ores and concentrates
The trade volumes of tin ores and concentrates in terms of import decreased by 18% and amount about 45 million tonnes. Tin ores and concentrates are imported and exported in rather small amount. In 2010 the world export of tin ores and concentrates increased by 21% and amounts about 58 million tonnes. It is worth to note that the importers are Malaysia -41% and China – 41%. The main exporters of tin ores and concentrates are Kongo – 33%, Australia – 24%, Peru -11% and Bolivia – 10%. It is worth to note that Russia in 2010 imported 1010 tonnes of tin raw materials, having decreased its share in the world export to 2%.
World tin trade
Annual volume of the world trade of tin in terms of import in monetary terms increased by 40% to 5,1 billion dollars and in volume terms it increased by 2% to 280,6 million tonnes. In 2010 tin was imported by such countries as Japan – with the share of 13% in the world import, USA – 12% in the world import, the Netherlands -11% in the world import. It is worth to note Russia imports rather small amount of tin, decreased import by 17% to 1421 tonnes.
Tin export in 2010 decreased by 3% to 253 million. There was export also from Indonesia -38%, Singapour -14%, the Netherlands – 9% and Malaisia – 9% in total world values.
Calculation of consumption and market balance and forecast till 2012
Annual dynamic of tin production and consumption in 2010 showed rather significant increase in both values. In 2010 the production increased to 329 thousand tonnes and the consumption increased to 347 thousand tonnes. In 2009 tin deficit changed to surplus on the world market to 15 thousand tonnes. In 2009 the market balance of tin again became deficit in the amount of 18 thousand tonnes. According to preliminary estimation of analysts METALRESEARCH in 2011 the deficit ot tin will decrease to 9000 and according to the forecasts in 2012 it will decrease to 7000 tonnes.
RUSSIAN MARKET OF TIN
Mineral-raw base
Russia has a big resource base of tin; its further resources are estimated as 1331 thousand tonnes. Practically all of them are located on the territory of Far East in vein tin. The share of placer deposits amounts only 5,3% of the resources.
Russia is one of the leaders in terms of tin reserves as well as China and Brazil. But they are mainly concentrated in remote areas and undeveloped regions of Far East and Far North. Almost 93,5% of proved and more than 78% of preliminary estimated reserves are located in subsoils of Republic Saha (Yakutia), Primorskiy krai, Habarovskiy krai and Chukotskiy autonomous district.
In terms of quality Russian deposits are inferior to those, which are located on the territories of the countries – main tin producers. In Russia there are about 12% of proved reserves in easy for beneficiation placers whereas in Indonesia (the biggest producer of the metal) – 100%. Average content of tin in ledge ores of Russian deposits – 0,28%, cassiterite content in Russian placers – 0,63 kg/m³; their content in ores of foreing objects of analogical type is 2-2,5 times higher.
Production
Ore processing and production of tin concentrates is organized on extractive enterprises. The current level of tin extraction in Russia isn't enough for meeting Russian neccesities for raw materials, and the part of it is imported but the volumes of external purchases are insignificant.
All concentrates for metallurgical process stage are delivered to Novosibirskiy tin combine (OJSC “NOK”), which is practically the only producer of metal tin in Russia. In 2010 there was produced 1212 tonnes of marketable tin, which is by 15,2% lower than the figure of 2009. Russia provides in total about 0,4% of the world production of the metal. Beside this, Novosibirskiy combine produces 35-50% of Russian solder production on the base of tin.
Trade
Tin is the only metal, which is imported in bigger amount than it is exported. Monthly dynamic of tin import is plural, there are leaps in import, such as in June of 2008 in the amount of 545 tonnes, in January 2009 in the amount of 321 tonnes, in Apri, in June, in July and September 2009. Tin import in 2009 decreased by 6% to 1700 tonnes. The main importers of tin to Russia were the Netherlands – 62% and Malasia – 19%.
Tin export is relatively small and it has homogeneous dynamic. Tin export in 2009 was 349 tonnes. The main tin exporter from Russia is OJSC “NOK”, which has more than 90% in export volume. 84% of Russian tin goes to Kazakhstan, 12% to the Netherlands.
Production and calculation of apparent consumption
In spite of the recovering of Russian economy, internal consumption of tin and tin production is on the low level and in the present time is about 2,4 thousand tonnes, which is by 12,4% lower than the corresponding figure in 2009. Nevertheless, in 2010, due to reduction of Russian production of metal tin, the part of internal demand, as earlier, was covered by import: import of unprocessed metal for that year decreased by lower rates than export.
Price analysis
WORLD MARKET OF ZINC
Klassification
This commodity item within the present survey includes unprocessed unalloyed zinc, which differs for degree of purity: from technical to purified zinc in blocks, plates, ingots, slabs and other analogical forms or in a form of pellets. In particular there was analysis for zinc (TNVED 7901110000) containing 99,99 mass% or more and zinc (TNVED 790112) containing less than 99,99 mass %. The products, which are under examination in this commodity item, are usually used in zincification (by immergeing into hot liquid alloy or by electrolytical settling down), for alloys obtaining, for cogging, drawing or extrusion or for casting.
Mineral-raw material base
World reserves of lead-zinc ores are located in a big number of countries. For the present day according to data USGS zinc reserves on the earth amount abut 248 million tonnes. Major reserves are in Australia – 21,4% and China – 16,9% of the world ones. There are rather significant reserves in Peru – 9,3%, Kazakhstan – 6,5%, Mexico – 6,0%, USA – 4,8% and India – 4,4%. Forecast resources of zinc in Russia amount about 3,2% of the world resources (not less than 63,2 million tonnes of metal).
The world extraction of zinc in 2010 increased according to data of USGS by 13,2% to 12,8 million tonnes. Most countries decreased zinc extracion. Among all it is worth to mention China, which increased zinc extraction by 12,9% to 3,5 million tonnes, Australia, which increased the extraction by 12,4% to 1,45 million tonnes and Mexico, which increased the extraction by 41% to 550 thousand tonnes. USA decreased zinc extraction by 2,2%, Canada by 4,1% and Ireland – by 9%. It is worth to note that Russia isn't a leader among countries-producers of zinc. In 2010 the volumes of extraction of zinc in Russia increased by 16,5%. According to preliminary estimation of analysts METALRESEARCH the world zind extraction in 2011 will increase by 4,4%. Russian zinc extraction will increase by 8,2%.
Refined zinc production
Refined zinc production in 2010 increased by 13,2% to 12,8 milllion tonnes. The biggest companies in zinc production in the world in 2010 were XSTRATA PLC, with the share in the production 6,1%, NYRSTAR (cooperation entrprise ZINIFEX and UMICORE), which has 8,2% in the world production, VOLCAN with the share of 6% in production values and HINDUSTAN ZINC LTD with the share in values 5,3%. Russian refined zinc producers are not leaders. For instance, the share of OJSC “CZP” in 2010 amounted about 1,3%, and OJSC “Electrozinc” was less than 1%. It is also worth to note that according to preliminary estimation of analysts METALRESEARCH in 2011 the volume of refined zinc production will increase by 4,4%.
Trade
World trade of zinc ores and conentrates
Annual trade volume of zinc ores and concentrates (lead-zinc) increased in terms of import in 2010 by 9% to 10,9 million tonnes. Import of zinc ores and concentrates is mostly done by China, which buys on the world market about 30% of zinc for further processing on its refining plants. Korea also has rather significant volume of import – about 13% of the world values and Japan – 9%. It is worth to note that according to preliminary estimation of analysts METALRESEARCH in 2011 the volume of zinc ores and concentrates trade will increase by 5,4%.
Russia also imports zinc ores and concentrates but in rather small volumes, about 0,5% in the world export. According to preliminary estimation in 2011 the volume of zinc import to Russia will decrease by 6,2%.
In 2010 there was export of zinc (lead) ores and concentrates mainly by Peru (35%), Australia (17%), USA (8%), Bolivia (6%) and Belgium (6%). Russia also exported zinc ores and concentrates in small amounts. Its share in total volume of export was 0,9%. According to preliminary estimation in 2011 Russia will increase the volume of export by 4,7%.
World trade of refined zincification
Annual volume of world zinc trade in terms of import in volume terms in 2010 was about 3,9 million tonnes. In 2010 the main refined zinc importers were USA -16%, Germany – 10% and the Netherlands – 9%. Russia also imports zinc in small amount, about 0,6% of the world import volume. According to preliminary estimation in 2011 the volumes of the world trade of refined zinc in terms of import in volume terms will increase by 5,4%, in monetary terms – by 24%.
The main exporters of refined zinc in 2010 were Canada – 12%, the Netherlands – 9%, Spain – 8%, Australia – 6%, Korea – 6% and other countries. Russia also exports refined zinc, but it doesn't have leader position among other countries with the share of 2% in the export volume in 2010.
Consumption and market balance and forecast to 2012
The world zinc consumption in 2010 decreased by 5,4% to 10,5 million tonnes, at that, the production increased by 18%. The production of refined zinc increased only by 13,2%. Thus the surplus of zinc on the market in 2009 in an amount of 747 thousand tonnes decreased to 296 thousand tonnes. Average price on LME increased in 2010 by 31,2% to 2170 $/tonnes. According to the forecast of the analysts METALRESEARCH in 2012 the volume of production will increase by 6,8% and the volume of consumption by 9,3% compared to 2010. Thus in 2012 zinc surplus will reduce to 7 thousand tonnes.
Prices analysis and forecast to 2014
Zinc was the only metal, which following the results of October 2010, returned to the prices of pre-crisis period, and exceeded the value of 2240 $ for tonne – the highest value beginning from May 2008. From the beginning of the year the metal on LME has had higher price by 70%. Deutsche Bank informs that, beside economic and speculative factors, there was influence of the demand from China, which led to higher price on zinc. The production of galvanised steel is increasing in China for construction of big infrustructure objects. Beside this it is going to be the demand growth on metal in quickly developing India.
It is worth to note that decrease in prices on zinc from record values of 2006 (4500$ for tonne) and crisis made zinc producers reduce significantly as ore extracton and also its processing. Today the world zinc industry works with the load level of 90%. Voluntary limitation of production has led to the reduction of offers, which is especially seen against the background of increasing consumption, but nevertheless the overstock of metal “overhangs” the market. The expectation of decrease in business activitity in the last months of the year and growth of zinc reserves on Shanghainese stock market were the reasons of prices decreasing in the end of the month. Further dynamic will depend on the speed of economy recovering in USA and Europe.
Average annual price on zinc according to the estimation of most experts will be in 2011 2364 $/tonne. In 2012 the volume of zinc production and the volume of zinc consumption will increase and the world surplus will decrease, which can lead to increase in price on zinc to 2541 $/tonne. In 2013 the world deficit of zinc is possible, which will lead to increase in price to 2721 $/tonne. This rally will end by price decrease to 2588 $/tonne in 2014 due to launching of new capacities of zinc production.
WORLD MARKET OF ZINCIFICATION
Mineral-raw material base
Forecasted resources of zinc in Russia are about 3,3% of the world ones (not less than 63,2 million tonnes of metal). The resources of category P1 are the most proved – and amount about 14% of the forecasted ones. Zinc resources are located in different parts of Russia; the most significant resources are located on the island New Earth (Novaya Zemlya) in Arkhangelskaya oblast.
Russia has about 17% of the world zinc reserves and has one of the top places in terms of these resources. The quantity of balance reserves of the metal in Russia is comparable with the quantitiy of forecasted resources and amounts 61,7 million tonnes. Almost half of them is located in the Republic Buryatia, where two biggest in the country deposits (Holodnenskoe and Ozernoe) are situated.
Most part of zinc reserves in Russia is located in deposits of 3 industrial types. Almost 70% of proved reserves are ores of lead-zinc (“stratiform”) and copper -lead-zinc (pyrites-polimetal) deposits. The content of zinc in their ores is very different, from 1% to 12,3%. The biggest Russian zinc objects are Holodnenskoe and Ozernoe deposits are inferior in terms of quality to foreign deposits. They have correspondinly 3,99% and 6,16% whereas, for example, the ores of deposit Red Dog in USA contain 17%.
About 30% more of zinc reserves are located in complex zinc-copper-pyrite ores, zinc content in which isn't high, and because of this zinc isn't extracted from ores in a number of developing objects.
Zinc extraction
Zinc extraction in Russia in 2007 increased compared to 2006 by 8%. In 2008 the extraction increased only by 0,5% and in2009 it decreased by 18% to 214 thousand tonnes. In 2010 the volumes of extraction recovered by 16,5%. Russia is in top 15 countries in terms of zinc extraction (11th place). More than 80% of Russian zinc was obtained on copper-pyrite deposits of Southern and Middle Ural.
Almost 3 quarters of Russian zinc extraction are provided by OJSC “Ural ore mining and smelting company UMMC” in its two subsidiary enterprises: OJSC “Uchalinskiy ore mining and smelting combine” (63% of the country extraction) and OJSC “Gaiskiy ore mining and smelting combine” (almost 10%), developing ural zinc-copper-pyrite deposits. About 10% more of metal was extracted by OJSC “Aleksandrinskaya ore mining company”, developing Aleksandrinskoe deposit in Chelyabinskaya oblast and more than 7,5% - CJSC “Ormet” on Djusinskoe deposit in Orenburgskay oblast; both compenies are the part of CJSC “Russian copper company”. The share of the company OJSC “Dalpolimetal”, which is developing polimetal deposits of Primorkiy kray, is about 9%. Ores beneficiation and production of zinc concentrates is done by mining and concentrating factories of extracting enterprises.
Production
Raw materials of the OJSC “UMMC” production is delivered to the plants of the company OJSC “Electrozinc”, which is the part of the company “UMMC” , to Vladikavkaz and to OJSC “Chelyabinskiy zinc plant”. CJSC “Russian copper company” deliveres concentrates to Chelyabiskiy zinc plant.
Production of refined zinc in Russia in 2010 increased by 16,5% to 249,5 thousand tonnes. The share of OJSC “Chelyabinskiy zinc plant” in 2010 amounted 159,8 thousand of zinc or about 64% of zinc produced in the country; compared to 2009 zinc production has increased by more than 33,2%. The company produces metal of high quality, which is in demand abroad.
Zinc production of the company OJSC “Electrozinc” in 2010 didn't work on full capacity, smelting of refined zinc decreased by 4,7% and amounted 89,7 thousand tonnes.
According to estimation of the analysts METALRESEARCH in 2011 zinc production in Russia will increase to 270 thousand tonnes. It will happen mainly due to increase in production of OJSC “Electrozinc”.
Trade
Import in terms of countries-senders and countries-receivers
Russia imports some quantity of refined zinc. In 2010 import increased by 3%, it was bought 21,7 thousand tonnes of the metal abroad, which is about the same as in 2009. The main supplier for Russia was OJSC “Kazakhzink” (Kazakhstan). According to estimation of the analysts METALRESEARCH in 2011 the volume of zinc import to Russia will decrease by 6,2%.
Export in terms of countries-senders and countries-receivers
The part of produced (mainly by OJSC “Chelyabinskiy zinc plant) in Russia refined metal, is exported. In 2010 Russia exported 94,7 thousand tonnes of refined zinc. The main customers were Turkey – 39% and the Netherlands – 46%. According to preliminary estimation of the analysts METALRESEARCH in 2011 the export of zinc from Russia will increase by 4,7%.
Apparent consumption
Apparent consumption of refined zinc in Russia in 2010 was 176,5 thousand tonnes compared to 2009 it has increased by 13,9% mainly due to increase in zinc production in 2010 by 16,5% and import increase by 3,1%.
Prices analysis
Russian prices on zinc in 2010 increased as on import (by 18%) and as on export (by 49%). It is worth to note that import prices on refined zinc in 2010 almost were alignied with zinc price on LME whereas export prices were undercut by 10,9%.
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