Metals to Market
Metal products from Pasminco are marketed in over 50 countries throughout the world, predominantly in Europe, the USA, Australia and Asia.
Demand in Europe remained strong, underpinned by solid growth in the continuous galvanizing sector of the market. Premiums for Pasminco zinc metal increased during the year in response to this trend. In the USA, sustained economic growth saw demand for zinc maintain its high levels of previous years. In spite of increased availability of imported zinc products, Pasminco premiums remained strong. In Australia, demand saw a slight increase from the previous year, while premiums for lead and zinc metal again returned a sound performance. The commissioning of the Sun Metals zinc plant in Townsville had little immediate effect on the Pasminco Australian market position.
In Asia, clear evidence emerged that the region is entering into a period of economic recovery following the severe downturn of the previous two years. Some markets experienced a stronger rebound than others, with South Korea, a major lead market for Pasminco, leading the way. Elsewhere, for example in Indonesia, growth trends were modest but positive. By the end of the year, economic growth and metal demand were clearly trending upwards in all the Company’s major Asian markets.
Premiums for both lead and zinc, continue to lag behind levels being achieved in the USA and Europe, primarily due to the continued record levels of Chinese lead and zinc exports. In spite of this excess of metal in the region, Pasminco is achieving increased premiums in some sectors of the market. The Pasminco response to these regional challenges faced is to provide a clearly differentiated level of customer service and focus marketing efforts on gaining a higher share of the value-added market segments in both zinc and lead.
Throughout the year the four Pasminco distribution centres in Kaohsiung, Hong Kong, Port Klang and Jakarta continued to provide our customers in Asia with an unparalleled level of service, unique to the region. Pasminco continues to work with its customers to ensure that the benefits associated with local warehouse supply and door-to-door delivery are fully realised.
As a result of the Pasminco Port Pirie smelter expansion, silver production has increased almost four-fold in two years, to in excess of 400tpa. Pasminco is now the world’s third largest refined silver producer, with all of its tonnage being committed on term contracts to customers in Asia.
During the year, lead marketing efforts were directed at expanding the demand for our highly innovative value-added products, ‘VRLA Refined’ lead and ‘MF Refined’ lead. These two products target the Valve Regulated Lead Acid battery market and the Maintenance Free battery market. Customers in these markets service the high technology, quality conscious automotive and telecommunications sectors. The ‘VRLA’ and ‘MF’ products are unique, having been developed by Pasminco in cooperation with the CSIRO, and are world leaders in their field. These products, together with Pasminco specialty alloys, will significantly improve battery performance by guaranteeing that critical impurities that cause deleterious gassing in batteries and premature grid failure are kept at extremely low levels. These Pasminco trademarked products are not available through the LME or from other lead producers.
The objective for Pasminco zinc sales this year has been to increase share in Asia, with emphasis on the high value added products targeted towards the die-cast and continuous galvanizing sectors. The aims were achieved, due, in part to the strong customer demand created by the Company’s rapid distribution service and a commitment to high level technical service and support. Consequently sales volumes increased into core markets and reduced exposure to less attractive markets.
The challenges for the year ahead will be to consolidate and expand upon the market share increases achieved for VRLA/MF lead products. For zinc, increased production capacity for die-cast alloy products will result in substantially increased sales. In customer service and support, a further expansion to the logistics management system is envisaged, which will provide backward integration with our customers’ systems, allowing them to move finished products through Pasminco’s supply/delivery chain.
Concentrates Marketing
Rising mine output moved the zinc concentrate market into surplus from the latter part of 1999 and the market is expected to remain well supplied for several more years. These conditions enabled smelters to negotiate improvements in frame contract treatment charges for calendar 2000 of approximately US$20/tonne.
In contrast, lead concentrate treatment charges moved slightly lower in 2000, as the weak lead price resulted in reduced supply from some locations and strong demand from China absorbed any surplus concentrate.
The first shipment of Century zinc concentrate was loaded for Budel Zink in December 1999. Regular shipments have continued at a rate equivalent to 100% of Budel’s requirements since April. Other customers for Century concentrate in Australia, Japan, Korea and several European countries had received shipments by the end of the financial year.
A major long term freight contract covering shipping of Century concentrate to Europe was finalised during the year. This contract will ensure that Century concentrate can be delivered to Budel and other European customers efficiently and at a very competitive cost.
Demand for concentrates produced at Broken Hill, Rosebery and Elura mines remained strong from the Group’s Australian smelters and export markets with sales predominantly to long term customers in Korea and Japan.
Total zinc concentrate sales for 1999/2000 increased by 27% compared to the previous year due to the commencement of sales from Century. Lead concentrate sales fell by 5% primarily due to reduced output from Broken Hill. Lead concentrate sales from Century are expected to commence in August 2000.
Prior to the introduction of Century, Pasminco Budel Zink purchased concentrates from a large number of mines located in North and South America and Europe. Termination of the various contracts involved was negotiated to facilitate an orderly transition to treatment of Century concentrate. To optimise feed mix, Pasminco’s Australian smelters purchase some concentrates from other Australian and overseas mines. The principal external suppliers to the Company’s Australian smelters were the Hellyer mine in Tasmania, the McArthur River mine in the Northern Territory and the Cannington mine in Queensland. The Hellyer mine ceased production in June 2000 and its concentrate will be replaced with additional material from Pasminco mines and overseas operations.
Priorities for 2001/02 include
- Manage sales of Century zinc concentrate as production increases to full capacity
- Successfully introduce Century lead concentrate into the market place
- Ensure continuation of a fully sold position for concentrates from Broken Hill, Rosebery and Elura.
Click here to download PDF files of:
- 2000 Pasminco Annual Report indexable pdf (4.8Mb)
- Notice of Annual General Meeting 2000 (96Kb)
- Financial Summary (110Kb)
- Operations at a Glance (19Kb)
(excerpt from Annual Report 2000)
- Production 5-Year Summary (13Kb)
(excerpt from Annual Report 2000)
- Performance 10-Year Summary (10Kb)
(excerpt from Annual Report 2000)
The financial information presented on this web site represents extracts from the audited financial report of Pasminco Limited for the financial year ended 30 June 2000 issued on 22 September 2000. These extracts cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the entity as a reading of the complete financial report.
The complete financial report, and the audit report thereon, can be obtained, free of charge, on request to the entity
annualreport@Pasminco.com.au
Return to Home