SMM analysis: China's refined zinc production fell in August, but may recover slightly in September

In August 2024, China's refined zinc production was 486,300 mt, down 0.68% MoM (3,300 mt) and down 7.64% YoY. Cumulative production from January to August was 4.158 million mt, down 3.4% YoY, below the expected value. Among this, domestic zinc alloy production in August was 90,700 mt, down 1,560 mt MoM.

In August, domestic smelter production declined due to the prolonged impact of heavy rains in Sichuan, which hindered local enterprise production. Additionally, some companies reduced output due to power rationing. Coupled with raw material procurement difficulties, expanded maintenance, and production controls in Hunan, Yunnan, Inner Mongolia, and Shaanxi, these factors contributed to a modest overall decline in production. Meanwhile, some smelters in Henan, Gansu, Qinghai, and Guangxi resumed operations after maintenance, offsetting some of the declines. Overall, the production decrease was relatively minor.

SMM expects that in September 2024, domestic refined zinc production will increase slightly by 1,000 mt to 487,300 mt, down 10.42% YoY. Cumulative production from January to September is projected to be 4.645 million mt, down 4.19% YoY. In September, the overall production change is expected to be minimal. Reductions will be concentrated in Inner Mongolia, Shaanxi, and Liaoning due to raw material shortages and routine maintenance, while increases will come from resumed production and maintenance recovery in Sichuan, Gansu, Qinghai, and Shaanxi. Thus, overall production change is expected to be limited.