Operating Rate at Chinese Zinc Smelters Lower in March on Large Ones, SMM Survey

SHANGHAI, Apr. 11 (SMM) - The average operating rate at Chinese zinc smelters was 69.4% in March, down 0.4 percentage point from February, according to an SMM survey. SMM adjusted capacity of survey sample to 6.19 million tonne per year.

Profit at zinc smelters was steady in March since zinc prices stayed high, which incentivized their production.

SMM understands zinc concentrate TCs were traded around 5,350 yuan per tonne (zinc content) in March, compared to 5,390 yuan in February. Meanwhile, some smelters recovered from maintenance, adding to output.

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The average rate at large smelters slid 3.6 percentage points to 77.6% in March. Despite slightly higher output at Zhuzhou Smelter Group and Yuguang Zinc Industry Co., Huludao Zinc Industry Co., Hechi Nanfang Nonferrous Metals Co and Shaanxi Dongling Industry & Trade Group undertook maintenance. Consequently, total output at large ones decreased nearly 14,000 tonnes in March on the month.

The average operating rate at medium smelters increased 1.3 percentage points to 68.2% in March. Sichuan Sihuan Electrolytic Zinc Co. ceased production, while Yunnan Jinding Zinc Corporation undertook maintenance cycle, leading to a drop in output. But output at Xing'an Copper & Zinc Smelting Co., Mengzi Mining & Metallurgy and Western Mining increased after maintenance. Output at Bayannur Zijin Nonferrous Metals and Zhongjin Lingnan Nonfemet Co. also grew in March.

Small smelters saw the average operating rate rise 6.5 percentage points to 40.2%. Despite maintenance at Luxi Bluesky Chemical Co., production at some smelters in Hunan’s Huayuan County recovered.

SMM expects the rate to fall further to 66.5% in April. Output at Huludao Zinc Industry Co., Hanzhong Zinc Industry Co. and Shaanxi Dongling Industry & Trade Group fell in April because of maintenance, SMM understands. Yuguang Zinc Industry Co., Bayannur Zijin Nonferrous Metals, Shaanxi Zinc Industry Co., Yuntong Zinc Co. and GreenNovo started maintenance. Besides, ore tightness will affect some production. Moreover, profit at zinc smelters decreased 50-100 yuan per tonne after zinc prices fell. This distressed some smelters.

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