China Refined Zinc Output Down 4.56% YoY in January

SHANGHAI, Feb 14 (SMM) - The increase in the domestic refined zinc output was less than expected in January.

Causes of the output increment: Yunnan Wenshan Zinc & Indium resumed the production after maintenance, bringing major increments. Some smelters in Shaanxi increased their production, but the output was lower than expected. Some smelters in Gansu resumed normal production.

Causes of the output reduction: Some small and medium-sized smelters in Hunan suspended the production for the Chinese New Year (CNY) holiday in mid-to-late January, resulting in major reductions. Some smelters in Guangxi were shut down for maintenance; some in Sichuan were operating under production restrictions.

The domestic refined zinc output is expected to drop 64,600 mt on the month to 453,000 mt in February, down 18,200 mt or 3.87% on the year. The output is expected to total 971,000 mt from January to February, a year-on-year decrease of 4.23%. The small and medium-sized smelters in Hunan have suspended the production due to the CNY holiday, and the suspension period is longer than that in the same period last year, which will contribute major reductions. Some smelters in Hunan will resume the production in early March. Some smelters in Gansu plan to conduct maintenance and reduce the output; some smelters in Yunnan will be overhauled for 10 to 15 days; some smelters in Sichuan have suspended the production for the CNY holiday, while other local smelters are under production restrictions. The smelters in Guangxi that have been shut down for maintenance or technical upgrade plan to resume the production in March. The fewer working days (28 days) in February will also affect the output.

SMM expects China’s refined zinc output to increase by 76,000 mt to 529,000 mt, up 32,100 mt YoY. The more working days in March will lift the output increment of 29,100 mt. The rest of the increment will be contributed by the smelters that resume from maintenance or holidays. The output is expected to be higher than in March 2021, mainly because Inner Mongolia was under the dual control of energy consumption in the same period last year, some smelters in Gansu were suspended, and Xinjiang Zijin did not produce in full capacity at that time.