SHANGHAI, Jul. 15 (SMM) – Large number of Chinese zinc smelters shut down during October 2008-February 2009 and during September 2011-August 2012, mainly because of continuously falling zinc prices and low TCs of domestic zinc concentrate, SMM says.
Domestic zinc prices fell all the way from around 20,000 to below 10,000 yuan per tonne in 2008, an SMM zinc analyst said. This precipitated output cut and lower supplies at zinc smelters. Meanwhile, TCs of domestic zinc concentrate slumped from 8,000 yuan per tonne early the year to 4,500 yuan per tonne (Zn content) at the end of 2008.
The period of 2011-2012 also witnessed large numbers of closures at zinc smelters in China, the analyst added.
Zinc prices slid from 18,000 to 15,000 yuan per tonne in 2011, then hovered around this level in 2012. TCs of domestic zinc concentrate also fell from 6,000 to 4,200-4,300 yuan per tonne (Zn content) in 2011.
Note: domestic zinc concentrate TCs are based on a benchmark zinc price of 15,000 yuan per tonne, with grade of 50%.
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