Zinc Concentrate:
The NBS reported China produced 527,000 mt of zinc concentrate in September, up 4.5% MoM and 13.8% YoY. YTD output through September was 4.1687 million mt, up 14.19% YoY.

The average operating rate at major domestic zinc smelters in September was 69.2%, up 2.99% from August. The SHFE/LME zinc price ratio fell from 8, to 7.7-7.8 during early August and early September, unfavorable for imports, and TC for imported zinc concentrate remained between USD 125-135/mt. In contrast, domestic TC continued to rise, causing mines to actively produce. Besides, domestic lead and zinc capacities continued to grow, including Yunnan Hualian Zinc & Indium's 8,000 mt/day dressing capacity entering commissioning September 10 and Inner Mongolia Zijin Mining's 3.30 million mt/yr low-grade lead and zinc capacity, which is scheduled for operation in September.

Enterprises in north China increased purchasing as the onset of winter season will cause transportation problem, keeping demand for zinc concentrate high and mines actively producing. SMM statistics reported the average SMM #0 zinc price in October was RMB 15,089.44/mt, boosted smelters willingness to produce. When combined with Inner Mongolia Chifeng Baiyinnuoer's 3,500 mt/day raw ore processing capacity having come online in October, domestic zinc concentrate output is expected to grow in October.

sources, integration at mines in some regions which began over a year ago is still underway.

Refined Zinc:
China Nonferrous Metals Industry Association (CNIA) reported domestic zinc output in September was 452,000 mt, up 17.24% YoY, and 3.43% MoM. YTD zinc output through September was 3.9097 million mt, up 11.68% YoY.

The latest SMM survey reveals the average operating rate at major domestic zinc smelters in September was 69.2%, up 2.99% from August, in line with CNIA data. Rising TC for zinc concentrate inspired smelters to produce. Zijin ramped up operation in September following the maintenance, and Xing'an Copper & Zinc started maintenance in early August, and completed in mid-September, with output in September growing on the month.

As Zhuzhou Smelter restarted production in October, zinc output, its zinc ingot output is expected to grow to 8,000 mt; Xing'an Copper & Zinc completed maintenance in mid-September, and will produce in full swing in October so as to meet the 100,000 mt production target for the year, with output in October expected to exceed 10,000 mt. SMM statistics shows the average SMM #0 zinc price in October was RMB 15,089.44/mt, the third highest for the year, which boosted the willingness of enterprises to produce. But Baiyin Nonferrous Metals Company has no plan to restart its production line, and zinc prices will unlikely rise noticeably since downstream demand did not improve significantly. Domestic zinc output will continue to grow in October, but any growth will be limited.