SHANGHAI, Mar 19 (SMM) – Operating rates across zinc concentrate mines in China are expected to rise 17.8 percentage points in February to 65.3% in March as mines in the north step up output in the warmer weather. Safety checks in the wake of an accident in Inner Mongolia in late February, however, will limit production recovery.
Output of zinc concentrate is estimated at 298,700 mt in Zn content this month, up 37.3% from 217,500 mt in Zn content in February.
The Chinese New Year holiday, cold weather and safety checks lowered zinc mining operation last month. Operating rates across zinc concentrate producers in February lost 11.7 percentage points from January to 47.6%, an SMM survey showed.
Most mines closed for CNY, with some shutting for up to 30 days. Mines in Inner Mongolia closed for safety checks after Yinman Mining shut for rectification following an accident on February 23. Lower temperatures in the north and higher TCs also discouraged mines from production.
Since mid-February, comprehensive processing fees for domestic zinc concentrate have exceeded those for imported materials as a closed arbitrage window kept seaborne materials from entering domestic markets.
Inventories of refined zinc across LME-registered warehouses declined to record lows while the holiday impact substantially grew domestic stocks. This prompted LME zinc to outperform its SHFE counterpart and left importers without arbitrage opportunities.