Zinc Trading

Every year more than 11 million tons of zinc is consumed across the globe and is extracted in more than fifty countries. It is the fourth most used metal in the world after steel, aluminium and copper, and plays an important role in the automotive and construction industries thanks to its anti-corrosive properties. Zinc, like steel, can also be indefinitely recycled, reducing the need to mine and extract the metal from ores (more information).

Redstone Commodity Search has been growing its connections to the Zinc industry over the past few years as demand has increased globally. It has been important for us to develop a footprint from producers to traders worldwide and to advance our consultants understanding of this niche industry. Recent roles that the team has been working on include:

  • Head of Trading (Zinc and Copper), China
  • Zinc Scrap Trader, Eastern Europe
  • Zinc Trade Support, Luxembourg
  • Zinc Powder Sales, Switzerland
  • Zinc Residue / Zinc Scraps Trader, United States
  • Copper and Zinc Traffic Operator, Switzerland

What is Zinc?

Zinc is a naturally occurring element found in the earth’s crust, normally in association with lead and other metals including copper, gold and silver. Approximately 70% of the world’s zinc is produced from mining while the rest comes from recycling secondary zinc.

Sphalerite (zinc sulphide) is the most commonly encountered zinc mineral and the most important ore of zinc. Zinc concentrate is produced through concentrating the sphalerite using the froth flotation method, considered to be the most widely used method for ore separation.

In froth flotation, minerals are separated from the gangue (commercially insignificant material surrounding the mineral in an ore deposit) by grinding the ore down into grains which are then mixed with water to form a slurry. The addition of a surfactant or collector chemical to the slurry renders the desired mineral hydrophobic so when the mixture is agitated, the hydrophobic particles attach to air bubbles and rise to the surface forming a froth. The froth removed from the tank produces a concentrate of the target mineral, normally zinc sulphide in zinc production.

The zinc concentrate is converted into pure zinc through smelting, either the pyrometallurgical or electrolysis process although electrolysis is the most widely used method. Metallic zinc deposit (pure zinc) which forms on the cathodes during smelting is melted down, cast and sold as ingots to customers.

While some mines produce primarily zinc, there are mines which produce it as a side-product when processing a different metal which had a higher concentration in the mined ore. Commercially pure (99.995% purity minimum) zinc is also known as ‘Special High Grade Zinc’.

How is Zinc Traded?

Zinc mines are scattered throughout the world with China, Peru and Australia being the principal producers of the metal – China produced around 38% of the global zinc output in 2014 – followed by the US, Canada, India, Kazakhstan, Bolivia, Mexico and Ireland within the top ten producing countries. China also plays a significant role on the demand side, standing alongside the USA and Japan as the top consumers of zinc.

On the financial markets, zinc is traded in terms of futures and options contracts on the London Metal Exchange (LME) and Chicago Mercantile Exchange (CME) but with increasing demand other exchanges are likely to add similar contracts to their product range.

Who are the Customers?

  • Galvanising plants – primarily in automotive and construction industry galvanisation
  • Steel mills
  • Alloy makers – e.g. brass and bronze production
  • Pharmaceutical companies
  • Fertilizer companies
  • Die-casters
  • Battery manufacturers