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Operating Rates at Zinc Smelters Remain High in January
Feb 27,2013 10:06CST
smm insight
Source:SMM
SMM survey of 41 zinc smelters, total capacity 5.59 million mt/yr and with 150,000 mt/yr idled, showed the average operating rate at domestic zinc smelters fell 4.37% MoM during January to 73.41%.

SHANGHAI, Feb. 27 (SMM) – SMM survey of 41 zinc smelters, total capacity 5.59 million mt/yr and with 150,000 mt/yr idled, showed the average operating rate at domestic zinc smelters fell 4.37% MoM during January to 73.41%, but was still high compared to the monthly average for 2012. Output at the surveyed smelters during December was 332,800 mt. 

The decline in operating rates should be mainly attributed to maintenance at smelters, but most smelters remaining in operation during January still kept output high. Profitability at zinc smelters also improved as zinc prices began to rise in late 2012, which also encouraged smelters to continue producing. Ample zinc concentrate supply also led to fierce price competition between domestic and foreign concentrate sellers, which forced concentrate suppliers to compromise on TC for zinc concentrate. SMM confirmed that TC for domestic zinc concentrate hovered between RMB 4,800-5,300/mt, but TC for imported concentrate rose to USD 125-130/mt.

Since the State Reserve Bureau (SRB) completed zinc purchases in late January and since zinc prices remained relatively low, some of the production lines restarted by smelters for production of goods for the SRB were suspended in February. However, high TC for zinc concentrate will prevent operating rates at domestic zinc smelters from falling too far, and  SMM expects the average operating rate to fall only slightly in February while still remaining above 70%.
 

operating rates at zinc smelter
China zinc production

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