SMM data showed that China's refined zinc output in January 2024 was 567,000 mt, a month-on-month decrease of 23,900 mt or 4.05%, and a year-on-year increase of 10.9%, which is lower than our previous expectations. In January, domestic zinc alloy output was 109,600 mt, an increase of 6,600 mt from the previous month.

In January, the output of domestic smelters declined, mainly due to maintenance of smelters in Guangxi, Yunnan, Sichuan, Anhui, Jiangxi and other places, and due to the shutdown of smelters in Yunnan and Guizhou for holidays; at the same time, new production capacity in Guangxi continued to be released. In Inner Mongolia, Gansu and Yunnan, output increased at the beginning of the year and production resumed from maintenance.

SMM predicts that domestic refined zinc production in February 2024 will drop by 57,300 mt month-on-month to 509,600 mt, a year-on-year increase of 1.63%; the decline in production in February is mainly due to the Chinese New Year holiday, with many secondary zinc smelters in Hunan and other places shut down for holidays. The maintenance of production lines of smelting plants in Sichuan brought about output reductions. In addition, the production days in February decrease by 2 days, and the overall output will drop significantly.