Guizhou Cuts Obsolete Capacity, Most Zinc Smelters Shut down

SHANGHAI, Oct 15(SMM)--Guizhou government is in great performance of cutting obsolete capacity, and most of the local zinc smelters are expected to suspend production through this year.

According to SMM survey, Guizhou province is now phasing out inefficient capacity, resulting in production suspension by most of the local zinc smelters in 2H of 2010.

In order to insure the accomplishment of energy efficiency target in the 11th "Five-year Plan", Guizhou government, party committees and other related departments are paying close attention to energy efficiency mission. According to Provincial Government Suggestion on Further Enhance of Obsolete Capacity Cut  released by Guizhou government, the capacity cut in nonferrous metal industry including: Phasing out small aluminum pre-baking cells of or below 100 KVA, obsolete lead smelting technique and devices such as by producing with sintering pot,  sintering pan or simple blast furnace; phasing out lead smelting technique by sintering machine without acid accumulator or tail gas treatment system; phasing out obsolete zinc smelting or zinc oxide producing technique and devices such as roasting with muffle furnace, manger furnace, tank or vertical tank(output below 8mt/day single tank) and collecting dust with simple condensation devices, which is planned mainly by Economic and Information Committee of Guizhou province.

According to SMM sources from related enterprises, Guizhou province is implementing inefficient capacity obsoleting with great effort, and the capacity cut in nonferrous metal industry in 2010 released by Ministry of Information and Industry Technology (MIIT) has drawn great attention. For instance, 45 zinc smelters were involved including 34 closed by Sep 10 and 11 forced to suspend production. Large scale zinc smelters have suspended production in 2H 2010, and expectation they will restart production within this year is limited. According to a manager involved, they suspended production for two reasons. First, they were wary of the policies, and would restart production when the requirement and scope is clear. Second, the demand from downstream buyers was limited, resulting in a low producing intention.

As a manager related told SMM, at present the enterprises still in zinc ingot production are of small scale, and mainly by smelting crude zinc into zinc ingot. Most of the downstream enterprises have already turned to manufacturers in North China and traders in Shanghai for purchase. It is still obscure for local large scale zinc smelters when to restart production and it will depend on the policy which is expected to be clear after spring 2011.

The annual output of zinc in Guizhou province was approximately 15,700 mt in 2009, and totaled 14,700 mt by August this year. It is anticipated that zinc output in Guizhou province will be lower than last year.

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