Will Zinc Get Boost after Output Cut Deal? SMM Reports

SHANGHAI, Mar. 14 (SMM) - Zinc prices fell noticeably last week. But zinc concentrate TCs in Central West China and some other regions were still low between 3,600-3,800 yuan per tonne (zinc content) with benchmark price at 15,000 yuan per tonne, SMM understands. Smelters incurred 200 yuan per tonne losses. Smelters thus plan to adjust their output plan.

Zinc Price to Rally This Week, SMM Predicts

Zinc smelters in Central West China agreed to slash output in the near term at a seminar. Shaanxi Dongling Industry & Trade Group prolonged maintenance plan to 1-2 months, compared to previous 15-20 days maintenance plan in mid-to-late March. Hanzhong Zinc Industry Co. and Shangluo Smelter may also undertake maintenance.

Such maintenance at these smelters will support zinc prices in the near term, SMM said.

Key zinc smelters in Central West China which have over 200,000-tpy zinc smelting capacity met in Xi’an March 13 and reached a deal on several respects, SMM learned.

They agreed to adjust production plan more flexibly since TCs of domestic and imported zinc concentrate are blow cost line. The Pb&Zn Branch of China Nonferrous Metal Industry Association agreed to push establishment of negotiation coordination mechanism for imported raw materials which was put forward December 14, 2016, so as to promote transformation and help increase profit for smelters. Participants will adjust structure and push transformation to meet China’s supply-side reform and capacity elimination requirements. 

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