High Profits Encourage Zinc Smelters to Maintain High Operating Rates

SHANGHAI. Apr 4 (SMM) - SMM data showed that the domestic refined zinc output increased 55,300 mt or 11.03% MoM and 12.26% YoY to 556,800 mt in March as expected. The alloy output registered 82,610 mt, up 16,900 mt on the month. The output totalled 1.57 million mt from January to March, up 6.62% year-on-year.

Although the domestic TCs for zinc ore dropped to 5,100 yuan/mt in metal content in March, the high profits encouraged domestic zinc smelters maintained high operating rates in March. The production cuts in Yunnan caused by power rationing contributed the major decline in output. Meanwhile, the Henan Jinli Zinc Smelter successfully reached full capacity in March, bringing additional growth. Smelters in Yunnan, Liaoning and Inner Mongolia carried out maintenance, but the actual output reduction was relatively limited. In terms of secondary zinc, the enterprises in Hunan maintained low operating rates amid poor profits. However, since most enterprises resumed work late in February, the secondary zinc enterprises also brought additional output growth in March.

SMM predicts that domestic refined zinc output in April 2023 will decrease 23,800 mt to 533,000 mt, an increase of 7.55% year-on-year; the cumulative output from January to April will reach 2.102 million mt, an increase of 6.86% year-on-year. The routine maintenance of some smelters in Hunan and Shaanxi will lead to major output cut. Smelters in other regions produce stably amid good profits.