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BMO Capital Markets said that collapsing demand for zinc caused by the novel coronavirus will swamp supply cuts from major producers Peru and India this year and leave the market with a massive surplus that will weigh on prices of the material used to galvanize steel. BMO Capital Markets analyst Colin Hamilton said "With zinc you have a big demand problem and unless you see far more cuts in supply we are still expecting a healthy surplus this year. Zinc is currently at levels that would likely force more supply out of the market.”
BMO estimates global zinc demand will fall by about 6% this year compared to a roughly flat year in 2019. It forecasts a 335,000-tonne surplus in the 14-million-tonne zinc market this year, up from a previous estimate of 150,000 tonnes.