London (Platts)--19Feb2013/1229 pm EST/1729 GMT

Global output of refined zinc metal exceeded usage by 265,000 mt in 2012, the sixth successive year that the market has been in surplus, according to preliminary data released by the International Lead & Zinc Study Group Tuesday.

In 2011, the surplus was 366,000 mt, according to ILZSG data.

Inventories held in London Metal Exchange, Shanghai Futures Exchange and Chinese State Reserve Bureau warehouses, together with those reported by producers, consumers and merchants, increased by 426,000 mt during the year to total 2.195 million mt, the ILZSG noted.

A reduction in global demand for refined zinc metal of 2.8% in 2012 was principally a consequence of falls in usage in Europe and China of 6.8% and 3.2%, respectively, the ILZSG said, adding that demand also decreased in Japan and the US.

The most significant increases were recorded in India, South Korea and Turkey.

Global refined zinc metal output decreased by 3.5% last year, primarily influenced by falls in output in Australia, Brazil, Bulgaria, Canada, China, India and South Africa.

In contrast, global zinc mine output rose by 5.1% from 2011, the ILZSG said, mainly due to a reported 14.4% increase in China. Elsewhere, increases in Australia, Mexico, Peru, the Russian Federation, Turkey and Uzbekistan were largely offset by declines in Brazil, India, Kazakhstan and the US.

Chinese imports of zinc contained in zinc concentrates declined by 34% to 821,000 mt in 2012, but net imports of refined zinc metal increased by 68.5% to 509,000 mt.

--Andy Blamey, andy_blamey@platts.com

--Edited by Jonathan Dart, jonathan_dart@platts.com

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