SHANGHAI, Apr. 16 (SMM) – Average operating rate at major domestic zinc smelters in March rose to 66.71%, up 2.64 % from February, the latest SMM survey showed.
The survey involved 41 enterprises with capacity totaling 5.66 million tpy, 150,000 tonnes of which was idle. Total output at these smelters hit 306,300 tonnes in March.
Operating rates at zinc smelters improved in March following the Chinese New Year holiday and due to growing downstream demand, but fell short of pre-holiday levels and the average for the same period a year ago. Rates were down this year since zinc prices fell while raw material, capital, and environmental protection costs all remained high, which caused enterprises into the red and forced many to conduct maintenance until zinc prices rebound. Prices for smelting by-product sulfuric acid were also sluggish, and ample electricity supply allowed zinc smelters to advance maintenance normally conducted later in the year.
Average operating rate at large smelters with capacities above 200,000 tpy was 83.75%, up 2.58% from February. Production at most enterprises increased following the Chinese New Year holiday, but output continued to fall at Shaanxi Dongling Nonferrous Metals and Hechi Nanfang Nonferrous Metals due to maintenance. This loss was partly offset by gains at Chihong Zn & Ge, where 140,000 tpy in new capacity added nearly 2,000 tonnes in output during March. Zhuzhou Smelter Torch Metals Company also reached full capacity in March, increasing the average rate at large enterprises.
Average operating rate at medium-sized smelters with capacities between 100,000-200,000 tpy rose to 52.5%. Gansu Chengzhou, as well as the Northwest Lead and Zinc Smelter owned by Baiyin Nonferrous Metals, remained closed in March, and Hunan Sanli’s maintenance in early March affected its monthly output. Sichuan Sihuan Electrolytic Zinc Company produced no zinc due to ongoing maintenance, and Luoping Zinc & Electricity suspended production after the Chinese New Year holiday. Hunan Taifeng’s output was up significantly after restarting production in March, contributing heavily to the 2.35% growth in operating rate at medium-sized enterprises.
Operating rate at small smelters with capacities below 100,000 tpy averaged 53.13%, up 3.64% on a monthly basis. Hanyuan Jintai was able to contribute output once maintenance was completed in late March, and Hubei Jinshi also restarted production in March, but output only grew slightly due to equipment breakdowns. Since March has more working days compared to February, total output at most smelters grew slightly.
SMM was told that smelters, including Baiyin Nonferrous Metals’ Northwest Lead and Zinc Smelter, Hunan Sanli, and Shaanxi Dongling Nonferrous Metals, also restarted production in early April, but Yunnan Chihong Zn & Ge and Jiangxi Copper began maintenance cycles. Yunnan Copper and Hechi Nanfang Nonferrous Metals both remain closed for maintenance. Thus, average operating rate at zinc smelters was expected to remain flat in April.