SHANGHAI, Feb. 27 (SMM) –Operating rate during January 2013 at zinc smelters remained high as zinc concentrate demand improved continuously. However, overall zinc concentrate supply has remained high since the beginning of 2012, resulting in market surplus. According to SMM survey, merely less than 10% of zinc smelters reported tight raw material stocks, while more than 90% said current zinc concentrate supply is sufficient for normal production.
Based on CNIA data, China's zinc concentrate output totaled around 4.93 million mt in 2012, up by over 14.4% YoY. China's zinc concentrate imports reached as high as about 1.94 million mt in 2012. In this context, China's total zinc concentrate supply significantly exceeded demand from zinc smelters, forcing zinc ore suppliers to surrender part of the profits. Despite some transportation problems, zinc smelters have yet to feel tight zinc concentrate supply at present owing to their ample stocks. As such, SMM believes that slight supply surplus in zinc concentrate is likely to continue for the foreseeable future.