Lead and Zinc Developments to the Year 2000, With Focus on Asia

Demand for both lead and zinc to the year 2000 will be characterised by modest to nil growth in mature economies, with positive 3 to 4 per cent annual growth rates in developing nations. Asia and China will feature significantly in this growth. Overall lead demand is expected to grow about 1 per cent a year, with industry becoming more dependent on the fortunes of the automotive industry as the lead-acid battery will be the only major end use to expand. Zinc will become more dependent on its main use, galvanising, as the automotive and construction industries move to high levels of dependence on corrosion prevention. Strong growth in zinc consumption in S.E. Asia, China and India is likely to feature widespread development of the continuous steel strip mini-galvanising line technology. Thank you Mr. Chairman for inviting me to this Conference. As an Australian I am honoured to be here to offer some thoughts about future trends in metal consumption -- with particular reference to the role of countries in my own neighbourhood, the developing Asian nations, including China. It is customary for a member of the producer fraternity to speak to the topic of future development. This is no doubt due to the fact that our companies are so often engaged in endeavours to determine the future prospects of the metals as essential background to massive investment decisions relating to the development of new mines and smelters. This is sometimes also applied in relation to the more painful decision of closures of aging operations. In this paper I have drawn upon recent studies by AM&S into the future of lead and zinc. While this work has been thorough and skillful, we are nonetheless left with uncertainty on a number of counts. Firstly. predictions in the past in our industry have not been all that credible. Need I remind a U.S. audience for instance of the Paley ' investigation setup by President Truman in 1950 to study U.S. copper requirements for 25 years in the future. Asarco's Simon Strauss gave those of us daring to forecast long term commodity trends a salutary reminder that the Paley Commission with all the expertise at its disposal missed the mark in its copper predictions by a very wide margin indeed. Additionally, it is difficult to take comfort from longer term economic forecasts. Too many important economic issues remain unresolved suggesting considerable caution. These include the threat of growing protectionism; low economic growth rates with stubborn unemployment levels; and levels of government expenditure at near saturation as a percentage of GDP, to name a few. However, on a more optimistic note. we can look to China, where there appears to be momentum in its economic growth; oil, where stable oil prices to the mid 1990's will contribute to inflation control; and the fact that LDC debt, while still a major issue, is declining in importance and priority. In the short time allocated to us. I wish to deal succinctly with the lead and zinc raw materials supply picture, which is one I do not believe will hold too many surprises for this audience. Following the review of raw materials supply, we will turn our attention to the changes in the pattern of demand towards the year 2000. emphasising the Asian position. In this context. I would like to focus on the theme of the changes in OECD consumption levels relative to those of the emerging nations. One area we will be paying special attention to is China.