SHANGHAI, Feb 14 (SMM) – A large-scale smelter in Henan province announced to halve its zinc production on Thursday February 13, as the COVID-19 outbreak deters the resumption of downstream demand and bolstered inventories of sulphuric acid at the smelter.
The smelter produced 300,000 mt of refined zinc per year before the cutback. Its production of lead ingots also started to shrink in early February. The producer sees risks of further production cuts if the transportation curbs remain in place.
Most smelters in north China used to ship their byproduct sulphuric acid to Hubei and Hunan provinces, areas badly hit by the epidemic. The shipment has been halted on the back of stricter transportation controls after the virus outbreak, and this may account for the sulphuric acid inventory buildup at smelters.
Smelters in Shaanxi and Henan provinces told SMM that sulphuric acid delivery destined for Hubei used to account 90% of their overall shipments.
SMM learned that inventory pressure of sulphuric acid has pushed smelters in Shaanxi, Henan, Hebei, and Anhui to production cut as of February 14.
