Market Basics » Zinc


Zinc is an elemental metal. It is listed on the Periodic Table as "Zn", with an atomic number of 30. Zinc is usually a gray metallic color, but it can be polished to a shiny silver luster. In nature, it is only found as a chemical compound, not as pure zinc, and can be used as a raw material for castings and coatings.

During the era of the Roman Empire, people used zinc to alloy copper into brass for weapons. In this crude process, the zinc was captured by the copper during the heating of the ores, though little was realized at the time about the importance of zinc in metallurgy.

Trading unit

Priced in U.S. dollars per metric tonne. Spot prices are quoted in U.S. dollars per pound.

Units for delivery

Ingots with a minimum purity of 99.995%, according to London Metal Exchange specifications.

Pricing mechanisms

Futures, ETF, spot

Avenues of trade

The global trade in nickel consists of over-the-counter, or OTC, transactions in spot, forwards, and options and other derivatives.

The most visible trade channel is zinc futures traded on the London Metal Exchange (LME).

Zinc futures are the third-largest traded contract on the LME, with a contract lot size of 25 metric tonnes.

Investors can put money into exchange traded funds that track the pricing of zinc without actually investing in the physical metal. ETF Securities offers its ETFS Zinc fund, which trades on the London Stock Exchange. The fund is designed to track the Dow Jones-AIG Zinc Sub-Index. Another option for investors is the PowerShares DB Base Metals ETF, which represents one-third each of zinc, aluminium and copper.

Physical zinc can also be bought and sold by use of a spot price.


Zinc is produced extensively in North and South America, Asia, Australia and Europe, with the most production coming from China, Australia, Peru, the U.S. and Canada, according to the U.S. Geological Survey.

About 70% of the world's zinc comes from mining, and about 30% comes from recycled secondary zinc, according to the International Zinc Association.

Some notable zinc-producing companies include Nyrstar, Oz Minerals, Korea Zinc and Xstrata Plc.


Zinc is used mainly in the galvanisation of steel and in zinc die casting. The metal also is used in the formation of brass by alloying it with copper.

Galvanised steel is used extensively in construction and engineering, in roadside crash barriers, wire fencing, corrugated iron and street signs. It also is used in the auto industry to increase the corrosion resistance of cars, trucks and trailers.

The engineering industry uses zinc pressure die casting to produce components for autos, household components and various other items. These range from carburetors, casing, water pumps and mouldings to panels of washing machines and cookers. Zinc in sheet form is used in some countries for roofing, guttering and general weather-proofing.

Extraction, Processing, Refining & Supply Chain

Zinc ores are dug from open pit (8%) and underground mines (80%) using conventional blasting, drilling, and hauling techniques. Zinc ores contain 5 -15% zinc. The ores occur as zinc sulfide (also called sphalerite), zinc carbonate (smithsonite), zinc silicate (calimine), and in compounds of manganese and iron (franklinite). Zinc ore is sometimes mined in conjunction with other metals, especially silver or lead ores.

To concentrate the ore it is first crushed and then ground to enable optimal separation from the other minerals. Typically, a zinc concentrate contains about 55% of zinc with some copper, lead and iron. Zinc concentration is usually done at the mine site to keep transport costs to smelters as low as possible.

Roasting & Sintering

Over 95% of the world's zinc is produced from zinc blende (ZnS). Apart from zinc the concentrate contains some 25-30% or more sulphur as well as different amounts of iron, lead and silver and other minerals. Before metallic zinc can be recovered, by using either hydrometallurgical or pyrometallurgical techniques, sulphur in the concentrate must be removed. This is done by roasting or sintering. The concentrate is brought to a temperature of more than 900°C where zinc sulphide (ZnS) converts into the more active zinc oxide (ZnO). At the same time sulphur reacts with oxygen giving out sulphur dioxide which subsequently is converted to sulphuric acid - an important commercial by-product.

The Hydrometallurgical Process

In a leaching stage the zinc oxide is separated from the other calcines. Sulphuric acid is used to do this. The zinc content dissolves whereas iron precipitates and lead and silver remain undissolved. However, the dissolved solution contains some impurities which need to be eliminated in order to obtain a high-purity zinc product at the end of the production process. Purification is mainly done by adding zinc dust to the solution. As all the elements to be removed lie below zinc in the electrochemical series they can be precipitated by cementation. The thus obtained purified solution passes an electrolytic process where the purified solution is electrolyzed between lead alloy anodes and aluminium cathodes. An electrical current is circulating through the electrolte by applying an electrical difference of 3.3 - 3.5 volts between the anode and cathode causing the zinc to deposit on the aluminium cathodes in high purity. The deposited zinc is stripped off, dried, melted and cast into ingots. The zinc ingots may have different grades: High Grade (HG) 99.95 % and Special High Grade (SHG) 99.99% of zinc.

Today over 90% zinc is produced hydrometallurgically in electrolytic plants.

The Pyrometallurgical Process

The Imperial Smelting Process has been the most important pyrometallurgical process. It allows simultaneous production of zinc and lead metals - roughly 1 ton of lead for every 2 tons of zinc.It is particularly indicated for treating concentrates with a significant amount of lead. The Imperial Smelting process is based on the reduction of zinc and lead into metal with carbon in a specially designed Imperial Smelting furnace. Pre-heated air is blown from below in the shaft furnace. The sinter is charged together with the pre-heated coke at the top of the furnace. Temperatures range from 1000°C at the top to 1500°C or more in the center of the furnace. The coke is converted into carbon monoxide which provides the means to reduce zinc and lead oxides to metallic zinc and lead. The lead which is below its boiling point, flows from the bottom of the blast furnace, carrying copper, silver and gold with it. Zinc evaporates and passes out of the furnace near the top along with other gases. To avoid that it oxidizes back to zinc oxide the zinc vapor is rapidly quenched and dissolved in a spay of molten lead in a condenser (lead splash condenser). By cooling the lead, crude zinc is released and is separated. The lead returns to the condensing process for another cycle of dissolving and then releasing more zinc.

The IS process is an energy-intensive process and thus became very expensive following the rise of energy prices in recent years. This and the lower production of bulk concentrates containing significant amounts of lead led to abandoning more and more the Imperial Smelting process. Today, Imperial Smelting furnaces are only in operation in China, India, Japan and Poland.

The major difference of the hydrometallurgical process and the Imperial Smelting process is that the first produce very pure zinc directly whereas the latter produces lower grade zinc that still contains significant impurities that have to be removed by thermal refining in the zinc refinery

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