SHANGHAI, Sep. 28 (SMM) - TCs of domestic zinc concentrate (50%) fall 200 yuan to 4,400-4,600 yuan per tonne (zinc content) in October, according to SMM data.
Domestic zinc concentrate supply still falls short of demand, even though rising zinc prices have incentivized some mines which had suspended to restart production.
Domestic ore output decreased in the first eight months of this year. Zinc concentrate output slid 3.51% compared to the same period of last year to 2.99 million tonnes, according to National Bureau of Statistics (NBS).
SMM learns some new and expanded capacity coming online in September and output growth at one company. But this year’s zinc concentrate output is still expected to fall because of low ore grade at some major producing regions and the ending of peak demand season.
Meanwhile, zinc concentrate imports also declined. Imports during January-August fell 37.7% year-on-year. Only a few importers placed orders in September as import losses remained around 1,000 yuan per tonne.
Zinc concentrate inventories at China’s ports have been falling over the months past, SMM says. Those at the Port of Lianyungang, Tianjin and Fangcheng decreased 290,000 tonnes from early this year.
Ore inventories at zinc smelters are also low. Most of them had raw material inventories only sufficient to about one month of production at the end of August, SMM reports.
Domestic zinc concentrate TCs still have room to fall, SMM predicts, citing deteriorating zinc concentrate shortages. SMM expects the average operating rate at domestic zinc smelters to be 78% in September based on a recent survey. In the meantime, demand for ore stockpiling in preparation for winter production remains strong.
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