SMM statistics showed that China's refined zinc output was 604,600 mt in October, a growth of 60,600 mt or 11.14% month-on-month and up 17.6% year-on-year, exceeding expectations. The output totalled around 5.45 million mt from January to October, up 10.65% year-on-year. Domestic zinc alloy production in October was 98,180 mt, an increase of 9,900 mt from the previous month.
In October, the output of domestic smelters increased significantly to over 600,000 mt. Except for the maintenance of smelters in Hunan and Gansu, other companies basically resumed normal production. There were fewer market disturbance factors, and smelters were highly motivated to produce. Strong alloy sales also drove some output growth. In addition, thanks to zinc oxide ore from Huoshaoyun mine, raw material supply at some secondary zinc smelters in Sichuan increased, growing output. The disruption from peak-hour power consumption measures in Hunan was reduced, and the production of secondary zinc smelters recovered.
SMM predicts that domestic refined zinc production in November 2023 will decrease by 6,000 mt from the previous month to 598,600 mt, a year-on-year increase of 14.09%; the cumulative output from January to November will reach 6.051 million mt, a year-on-year increase of 10.98%; the production will drop slightly in November, mainly due to the half-month maintenance at some smelters in Yunnan and the power rationing of 10% in Yunnan issued at the beginning of the month. The overall output reduction is expected to be around 1,100 mt. Smelters in Gansu resumed from maintenance and increased output. Overall, the output reduction is not obvious yet and is basically in line with expectations.
