How Sichuan Earthquake Affects Zinc Concentrate Output? Where is Zinc Price Going? SMM Reports

SHANGHAI, Aug. 9 (SMM) - A 7-magnitude earthquake shocked Jiuzhaigou County, Aba prefecture, Sichuan Province at 9:19 pm August 8. Mines and zinc smelters in Sichuan were little affected so far due to long distance from epicenter, SMM finds. They are able to maintain normal production. 

Lead-zinc mines affected are mainly those in Gansu’s Longnan City, which is located only about 100 km away from epicenter, SMM finds. Longnan is one of major domestic lead-zinc ore producing regions. Gangsu Province produces some 330,000 tonnes (zinc content) of zinc concentrate output each year, of which, over 60% is contributed by Longnan, SMM survey showed.

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The earthquake was strongly felt in Longnan, and Longnan Work Safety Administration required local mines to suspend underground operation, but did not disclose when they will be allowed to restart. Dressing plants are not affected, though. The impact on local zinc concentrate production will be limited, SMM predicts.

Domestic zinc concentrate output will see limited growth this year with constraints from environmental protection and lower-than-expected new capacity commissioned, SMM foresees. The growth may be only 150,000 tonnes (zinc content) this year. Growth at overseas mines will be steady, SMM added.

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Growth in global zinc concentrate output will be dragged down by China. Limited concentrate growth will in turn restrict refined zinc output. So, fundamentals will continue to bolster zinc prices in the foreseeable future, SMM said.

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