SHANGHAI, May 9 (SMM) – China’s refined zinc output rose as expected in April, as smelters that carried out maintenance in February-March or suspended since last year restarted operations. Those smelters are mostly located in Inner Mongolia and Gansu.
The latest SMM survey showed that 479,600 mt of refined zinc was produced in China in April, up 2.79%, or 13,000 mt, from a month ago and up 4.02% from a year earlier. Zinc capacity which was covered in the SMM survey remained unchanged at 6.09 million mt on an annualised basis.
The production in March was revised up to 466,600 mt due to the resumption of a smelter in Hunan. Surveyed smelters produced 74,133 mt of zinc alloy in April, up 7.93% on the month, with hot-dipped material accounting for 59,783 mt.
The resumption of logistics services helped smelters operations to normalise in April, and this also lifted the zinc production last month. This was compared with March when the lingering impact of the coronavirus pandemic on trans-provincial delivery disrupted raw materials supply in Yunnan and Shaanxi.
Last month, the recovery of production offset the reduction caused by maintenance at smelters, which occurred mostly in Qinghai, Guangdong and Yunnan.
SMM expects China’s refined zinc output to fall about 4,500 mt from April in May as some smelters will bring forward maintenance schedule due to narrowed profit margins and some smelters in Yunnan, Gansu, Inner Mongolia and Guangxi had already planned for overhauls in May.
Profits at smelters have been squeezed by falling treatment charges (TCs) of zinc concentrate, weighed by delayed shipments from overseas amid the coronavirus crisis and low raw material inventories at domestic smelters. As of May 8, SMM assessed the TCs for domestic zinc concentrate have declined to 5,000 yuan/mt in metal content, with TCs for imported concentrate dipping to $150/dmt.
