SHANGHAI, Nov. 12 (SMM) - SMM recently conducted a survey and found that the average operating rate at major domestic zinc smelters during October was 75.72%, up 6.52% from the 69.2% average in September and the highest monthly average for the year. SMM surveyed 41 enterprises, which have a total capacity of 5.64 million mt, of which 150,000 mt is idle. Total output at the surveyed smelters during October was 346,400 mt.
The average operating rate at zinc smelters climbed in October to 75.72%, the highest monthly average of the year, and due in large part to the rush by some smelters to complete annual production targets. The average SMM #0 zinc price for October was RMB 15,089.44/mt, up RMB 233.65/mt from September’s RMB 14,855.79/mt, and the highest price since February. The higher prices allowed smelters to increase output, but some other smelters also restarted production after completing maintenance.
The average operating rate in October at large enterprises (capacities above 200,000 mt/yr) was 89.86%. Zinc ingot output at Zhuzhou Smelter returned to 8,000 mt after completing maintenance, which helped raise the average for large producers.
The average operating rate at medium-sized enterprises (capacities between 100,000-200,000 mt/yr) rose to 62.79%. Operations at Northwest China Lead-Zinc Smelter (Baiyin Nonferrous Metals Company) and Gansu Chengzhou remained suspended, but Shangluo Zinc Smelter restarted production in September after completing maintenance, and then increased output during October. Inner Mongolia Copper and Zinc Smelting Company also completed maintenance in mid-September and increased output in October to complete annual output targets.
The average operating rate at small enterprises (capacities below 100,000 mt/yr) rose to 67.33%. Western Mining restarted production after maintenance in October, boosting operating rates at smaller enterprises. No output was reported by Sichuan Hanyuan Jintai due to ongoing maintenance, but plans to restart production in early November.
Baiyin Nonferrous Metals has yet to decide whether or not to restart production lines at this time, and when combined with sluggish downstream demand and modest zinc price gains, SMM believes operating rates at smelters will only rise slightly during November.