In August 2023, SMM China's refined zinc output was 526,500 mt, a decrease of 24,600 mt or 4.46% month on month, but a year on year increase of 13.78%, well below our expectations. From January to August, the cumulative output of refined zinc stood at 4.3 million mt, a year on year increase of 10.08%. Domestic zinc alloy output was 86,200 mt in August, 700 mt lower than in the previous month.
Longer-than-expected maintenance at smelters in Guangdong, Hunan, Sichuan and Inner Mongolia caused the output to miss expectations significantly. The recovery of smelters in Gansu, Shaanxi and Henan after maintenance contributed to a certain amount of output growth, though.
SMM predicts that domestic refined zinc production in September 2023 will increase by 37,100 mt or 11.85% from the previous month to 563,600 mt. The cumulative output from January to September will reach 4.868 million mt, a year-on-year increase of 10.28%; entering September, the output was basically in line with expectations. Except for routine maintenance in Inner Mongolia, Gansu and Hunan, recovery of smelters in Hunan, Yunnan, Inner Mongolia and Sichuan from maintenance will contribute most of the output increase. As the smelter maintenance is completed, the month-on-month increase in output in October is expected to exceed 20,000 mt.
