2011 July Zn Output Data Analysis

SHANGHAI, Aug. 1 (SMM)--

Zinc Concentrate:
Domestic zinc concentrate output has been increasing both on a MoM and YoY basis since March. Zinc concentrate output rose significantly in Inner Mongolia, Sichuan, Guangxi, Shaanxi, and Gansu provinces, while output was down in both Yunnan and Hunan provinces.

Zinc concentrate output in Hunan province was down 31.7% YoY during 1H 2011 due to integration at mines, while output in Yunnan province also fell 14.68% YoY. Mine operators dominated markets due to raw material shortages since inventories at smelters were being consumed and new capacity continued to come online. Despite rising zinc concentrate output, shortages were still reported. As a result, the average price for #1 zinc rose by RMB 800/mt in June, but TC remained relatively unchanged and even fell in some regions.

Output grew the most in Guangxi and Hunan provinces, up 18 kt and 9 kt, respectively. Now that mine inspections in Xiangxi, Hunan province are now completed, many lead and zinc mines, as well as zinc smelters, have been steadily restarting production since late May.

Zinc concentrate output fell the most in Yunnan province due to ongoing mine integration. YTD zinc concentrate output through June was 217.8 kt, down 14.68% MoM. According to SMM sources, integration at mines in some regions which began over a year ago is still underway.

Refined Zinc:
According to the CNIA, domestic zinc output during June was 446.7 kt, up 6.91%, while YTD output through June was 2.53 million mt, up 2.14% YoY.

Higher output during June was mainly from increases in Hunan, Yunnan, Sichuan and Inner Mongolia provinces. Output in Hunan province was up by 12 kt since smelters in the Xiangxi area have steadily restarted production.

Zinc output in Japan fell sharply during 1H 2011 due to the March earthquake, negatively affecting exports. Refined zinc imports from Japan during June were 527 mt, down 79.07% YoY, and YTD imports through June were 4,848 mt, down 61.41% YoY.

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