SHANGHAI, Sept. 21 (SMM) -- A recent CBI survey of 39 zinc smelters (total capacity: 4.51 million mt/yr) revealed the following insights:
1) Operating Rates
According to the survey, output at the 39 zinc smelters during August was 293kt, with an average operating rate of 78%, down 4.5% from July levels. The capacity utilization rate at the 39 zinc smelters experienced declines, especially for smelters with capacity greater than 150kt/yr, which were 83%, down 7%. Operating rates at smelters with capacity between 20-100kt/yr were 65.1%, down 1.4%, while operating rates at smelters with capacity of 100-150kt/yr (including 100kt and 150kt) were 79.5%, down 4.1% compared to July.
2) Raw Material Inventories
According to the CBI survey, only 17.9% of smelters believe raw material supply is tight, while the remaining 82.1% believe raw materials are easy to obtain. Although operating rates at domestic zinc concentrate producers have not increased recently, zinc smelters, especially larger ones, have ample raw material inventories, so only the low TC of lead concentrate is the major complaint.
3) Zinc Inventories
The CBI survey revealed 41% of smelters were holding no zinc ingot inventories, down 5% from July levels, while 59% of smelters have only limited inventories. Spot supply pressure in all trading cities, as well as transportation problems in north China, was behind the increase in zinc inventories.
4) Price Forecasts
According to the survey, only 30.8% of zinc smelters held an optimistic attitude towards market outlook, after zinc prices soared to RMB 16,000/mt without actual support. 20.5% of zinc smelters were pessimistic with regard to price trends after China’s National Day holiday. New zinc projects came online one after another, and zinc ingot output kept increasing on a monthly basis, but the downstream consumption remained weak. In the context, the remaining 48.7% of smelters were cautious about zinc prices in the coming week.
5) New Projects
The survey reveals that Bayannaoer Zijin Non-ferrous Metals Company put its 100kt/yr of new project into operation. However, Sichuan Hongda Company has postponed its 100kt/yr new project to 2010. Therefore, China’s new zinc smelting capacity will reach 1 million mt/yr. Up to date, all new capacity coming online has reached 480kt, a 48% of total new capacity projects.
Copyright © 2009, CBI (Shanghai) Co., Ltd. All Rights Reserved.
None of this material may be used for any commercial or public use in any form or means, without the prior written consent of CBI China. For reproduction issue, please contact us by email: email@example.com or tel:86-21-51550040