China Nonferrous Metals News
SMM: Processing charges (PC) for zinc concentrates lifted by RMB 300/t on-month in January 2019, reaching RMB 5,400/t. In December 2018, PCs on domestic ore in combination with the price sharing-scheme for zinc concentrates boosted smelters’ profit margins up to RMB 2,000/t. Despite increased profit margins, domestic refined zinc output (including recycling) dropped slightly to 472.4 kt in December 2018, showing a decline from November. The decline mainly came from small production cuts made by smelters after accomplishing their annual production targets and/or from reduced output from the Zhuzhou smelter due to its relocation. The decline in output offset output growth of a few hundred tonnes boosted by increased profit margins during December.
Given factors such as relocation plans, environmental concerns and electricity supply restrictions, domestic zinc output is unlikely to grow rapidly in the short-term. SMM forecast domestic zinc (including recycling) at 455.2 kt in January 2019, down 3.7% on-month and down 11.4% on-year.