NANNING, May 25 (SMM) – China’s zinc fundamentals are likely to reach a tight balance by 2019, with new capacities across smelters, said SMM senior analyst Liu Mengyue.
Over 200,000 mt of capacities are planned to be added this year, but only 160,000 mt of additional zinc production is expected, she told delegates at the SMM Lead Zinc Summit on Thursday May 24 in Nanning, Guangxi.
This is due to limited supplies of raw materials, environmental limitations and maintenance works, Liu said.
In the first four months of this year, output at domestic zinc smelters rose 7.3% on the year and stood at 1.84 million mt. For the same period, operating rates at smelters came in at 74.6% on average, up almost 5 percentage points year on year, according to SMM data.
Liu expects China’s zinc concentrate output to be 4.32 million mt this year with imports at 1.42 million mt.
Zinc prices are expected to come off in the second half of this year but to find support at the 21,000 yuan/mt level, according to Liu. She sees LME zinc trading at $2,750-3,300/mt this year and SHFE zinc at 21,500-25,000 yuan/mt.
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