[SMM Analysis] in September, the operating rate of domestic mining enterprises decreased month by month, and the discharge of zinc concentrate was limited.

SMM10, 18 March:

According to the SMM survey, the output of SMM zinc concentrate in September was 358000 tons, down 0.5 percent from the previous month, down 8.9 percent from the same period last year, and the operating rate was 78.3 percent, down 0.4 percentage points from the previous month and 7.6 percent from the same period last year.

The operating rate of large enterprises with an annual capacity of more than 10, 000 tons was 81.5% in September, unchanged from the previous month. The operating rate of medium-sized enterprises with an annual production capacity of 55, 000 tons was 50.9%, down 1.8 percentage points from the previous month. The operating rate of small enterprises with an annual capacity of less than 5000 tons was 38.8%, down 10.5 percentage points from the previous month.

In September, the discharge of domestic mining enterprises was partially limited, and the start-up situation became weaker than the previous month.

In terms of scale, some large mining enterprises finished overhauling in September and resumed normal production, and some large mining enterprises had problems in the early flotation plants in September, and their contributions increased substantially, while under the influence of the southern rainy season, some mines in Guizhou, Hunan and other places were mainly open-pit mining enterprises, the original mining was affected, and some mines stopped production during the rainy season, reducing the normal output by more than 1/3. To sum up, the increase and decrease of large mining enterprises are basically offset, and the output and operating rate have little change.

On the other hand, the reduction of small and medium-sized mining enterprises is more obvious. In addition to the influence of maintenance by some mining enterprises, some mines reflect that there are more concentrates in the market at present, the impact of superimposed imported mines is greater, the choice of smelters is larger, and there is a higher stock of raw materials. Mine profits are affected, some mines are less willing to produce, adjust production plans, and actively reduce production affects September output. In addition, some small miners face the problem of insufficient supply of raw ore, which is also a drag on output.

In October, some mine maintenance superimposed the impact of the National Day holiday, and the output is expected to be further reduced compared with September.

SMM estimates that the national mine operation rate in October is expected to be 76.3%, down 2 percentage points from the previous month and 1.9 percentage points from the same period last year.

According to SMM research, in September, the national output of zinc concentrate was 358000 metal tons, down 2.58% from the previous month and 2.5% from the same period last year. SMM expects national zinc concentrate production to be 349000 metal tons in October, down 2.5% from the previous month and 2.5% from a year earlier.