Shanghai Nonferrous Metals News
Domestic zinc smelters have enjoyed profit margins of RMB1,000~1,500/t recently, thanks to relatively high PC charges at RMB6,000~6,500/t for zinc concentrates (50% grade). Boosted by high margins, large zinc smelters have been operating at full during the CNY holiday period, with stocks mounting after the holiday. However, in the wake of the COVID-19 outbreak interrupting transportation, domestic zinc smelters have been forced to cut operations due to a combination of issues including increasing stocks of refined zinc and sulfuric acid, increasing liquidity pressures, and a shortfall of raw materials. With the recent easing of logistics and travel restrictions, operations at domestic zinc smelters are projected to return to normal in the near-term. As of 20th February, SMM forecast domestic refined zinc output of 388.3 kt in February 2020, down 54.8 kt or 12.3% m-o-m.