SMM Survey: China’s Refined Zinc Output Grew in December 2022, Expected to Fall in January

SHANGHAI, Jan 6 (SMM) - China's refined zinc output was 525,800 mt in December 2022, a month-on-month increase of 1,100 mt or 0.21%, and a year-on-year growth of 12,500 mt or 2.43%, SMM data showed. Output in 2022 totalled 5.98 million mt, down 1.77% from 2021.

According to SMM survey, domestic refined zinc output in December increased compared with November, slightly lower than market expectations. One large smelter in north-west China completed its annual production plan ahead of schedule before it cutting output in December. Unexpectedly, one smelter in north China cut output due to equipment failure. The increase in output was mainly driven by the smelters in Shaanxi operating at capacity and smelters in Sichuan resuming production in December.

In 2023, the domestic benchmark TCs of Zn 50% zinc concentrate stand at 5,500-6,000 yuan/mt with metal content, ensuring high profit at smelters. According to SMM survey, most of the domestic medium-scale and large-scale primary zinc smelters will maintain relatively high operating rates during Chinese New Year holidays. In addition, Western Mining will complete maintenance and Sichuan Sihuan Electrolytic Zinc Company will beef up production. Jinli Gold & Lead plans to yield zinc ingots in the first half of January, with a planned output of 150-200 mt/day. In terms of production reduction, it is mainly concentrated in secondary zinc smelters in Sichuan, Hunan and Jiangxi, due mainly to the closure for CNY holidays.

Refined zinc output is expected to fall 21,100 mt month on month to 504,600 mt in January 2023, a year-on-year drop of 12,900 mt or 2.5%.