SMM April 30:
ccording to SMM data, China's refined zinc production in April 2026 was up 1.1% MoM and up 5.1% YoY. Cumulative smelter production from January to April was up 5.7% YoY, below expectations. Entering April, domestic smelters' production increase fell short of expectations. Apart from routine maintenance in Shaanxi, Xinjiang, and Gansu, unplanned maintenance in Guangxi and Hunan caused some supply reduction. The main increments came from production ramp-ups in Inner Mongolia and Xinjiang, as well as maintenance recovery in Hunan, Sichuan, Yunnan, and Henan. SMM estimates that China's refined zinc production in May 2026 is expected to decline 1.6% MoM and increase 4.5% YoY. Cumulative smelter production from January to May is expected to be up 5.5% YoY. The May production decline is mainly due to smelter maintenance in Shaanxi, Liaoning, Yunnan, and Guangxi, while increments are mainly concentrated in maintenance recovery and production increases at smelters in Xinjiang, Inner Mongolia, Gansu, Sichuan, and Guangxi.
Overall, refined zinc production release in April and May fell short of expectations. This was mainly because, as overseas ore disruptions increased and domestic ore recovery remained limited, TCs accelerated their decline—imported TCs had already dropped to $39.25/dmt, while domestic weekly TCs broke below historical lows to 850 yuan/mt in metal content. Under low TCs, although smelters had profit support from sulphuric acid and by-products, raw materials compressed enterprise profits to a certain extent, with overall profit margins narrowing significantly. Meanwhile, under low TCs, smelters intensified competition for ore, increasing the difficulty of raw material purchases. Days of raw material inventories fell below 19 days, and raw material issues at some smelters were amplified, constraining smelter production release capacity to some extent.
Looking ahead, although China's sulphuric acid exports accounted for only about 4% of production (domestic sulphuric acid production was around 120 million mt, with sulphuric acid exports of 4.6494 million mt in 2025), news of export restrictions caused sentiment disturbance to some extent. Upside room for sulphuric acid prices was limited. If sulphuric acid prices pull back while smelter TCs remain low, smelting losses would increase, and smelter production is expected to decline further. Alternatively, if sulphuric acid prices hold steady, downside room for TCs would be limited, and smelter production may be maintained, but incremental volume would be difficult to release. Going forward, close attention should be paid to trends in sulphuric acid prices and TCs.
