SHANGHAI, May 11 (SMM) – Operating rates in May across zinc oxide plants, especially in Shandong, Jiangsu and Hebei provinces, are likely to be affected as environmental inspections intensify ahead of the Shanghai Cooperation Organisation (SCO) Summit in Qingdao, Shandong province, in June. 

Hebei and Jiangsu border Shandong in the north and south, respectively. Most of China's zinc oxide production is located in these three provinces and account for more than half of China's capacity.

Environmental efforts have escalated in 2018. In Hebei, production continued to recover from the end of the two political sessions in March. In Jiangsu and Shandong, small zinc oxide plants that failed to pass environmental probes as well as those undergoing coal-to-gas rectification, have suspended production, SMM learned. As of Thursday May 10, about 10% of monthly output of zinc oxide has been affected by environmental inspections, SMM estimated.

Some zinc oxide plants said that they will be affected by Qingdao Summit at the end of May, SMM learned, but remained confident about maintaining regular operations for now. SMM expects operating rates at zinc oxide plants to decline in May.

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