CNY holiday, shorter month lower zinc output by 3.2% in Feb

SHANGHAI, Mar 8 (SMM) – Production of refined zinc in China declined 3.19% from January and 8.45% from February 2018 to stand at 420,400 mt in February.

Surveyed capacity held unchanged at 6.085 million mt/year. Since January, dismantled capacity at Zhuzhou Smelter Group, of 250,000 mt/year, were excluded and 150,000 mt/year of capacity at Wenshan Zinc and Indium Smelting and Sihuan Zinc & Germanium Technology were included.

While most large zinc smelters maintained operation during the CNY break, small and medium-sized smelters closed, with some in the west of Hunan shut for up to a month.

Aside from suspending for holidays, a shorter month with fewer working days also contributed to the decline in zinc output. Hechi Nanfang recovered from maintenance last month, but failed to offset the losses in overall production across the nation.

Treatment charges for zinc concentrate climbed to record highs in March, bolstered by sufficient supplies of zinc concentrate and limited growth in demand in the short run. Such healthy profits improved production enthusiasm among smelters.  

While Sihuan Zinc & Germanium Technology and Liuzhou China Tin Group cut production for maintenance in March, smelters in the west of Hunan returned from holidays. Besides, March is longer than February.

SMM learned that most zinc smelters saw their production substantially expand this month. Output of refined zinc in China is expected to grow 6.52%, or 27,400 mt from February to stand at 447,800 mt in March, up 0.42% from a year earlier.