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Zinc Output Fell in August, but Likely to Reverse the Trend in September

iconSep 8, 2021 17:48
Source:SMM
Domestic zinc output stood at 508900 mt in August 2021, down 1.22% or 6300 mt on the month and 0.04% on the year, according to SMM. Cumulative output in January-August totalled 4.042 million mt, a year-on-year increase of 4.47%. Alloy output at domestic zinc smelters in SMM’s survey sample was 75,500 mt in August, up 80 mt on the month.

SHANGHAI, Sep 8 (SMM) - Domestic zinc output stood at 508900 mt in August 2021, down 1.22% or 6300 mt on the month and 0.04% on the year, according to SMM. Cumulative output in January-August totalled 4.042 million mt, a year-on-year increase of 4.47%. Alloy output at domestic zinc smelters in SMM’s survey sample was 75,500 mt in August, up 80 mt on the month.

SMM survey showed that the actual decrease in domestic zinc output in the month was less than expected. The main reason was that the decline in output as a result of power restrictions in Guangxi and Yunnan has fell short of expectations. Among them, the production of most smelters in Yunnan has basically returned to normal except for a few that are still under the impact of power curtailment. In mid-to-late August, the regional production limit in Guangxi has narrowed from 50% to about 10-20%. Meanwhile, output changes in other places were basically in line with estimate, such as the planned reductions due to routine maintenance of large smelters in Hunan and Gansu.

In September, the production activity in Yunnan was stable with limited impact of power curtailment. In addition, some smelters in Yunnan have received a notice that there were no power restrictions before September 10. The current power curtailment in Guangxi is still exerting influences, but at a less severe extent when compared with August. Power curtailment in Hunan has basically ended, and many secondary zinc smelters near Luxi County have returned to normal. While places like Gansu, Inner Mongolia will also contribute to the rising output after resuming production following the completed maintenance. As such, output in China in September is expected to add 11,800 mt on the month to 520,700 mt.

For statistics of October, only smelters in Jiangxi have scheduled to carry out maintenance in this period so far. Guangxi Yusheng has planned to commence production in October-November. SMM will continue to track the market production profile.

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