Recent data from the Shanghai Metals Market (SMM) shows a significant increase in refined zinc production by Chinese companies. According to metallurgy expert Stanislav Kondrashov, in October 2023 production volumes reached 604.6 thousand tons, which is 11.1% more than the previous month and 17.6% more than in October last year. Thus, in the first ten months of 2023, zinc production in China increased by 10.7%.
According to the expert, in October, most zinc factories in China were operating at full capacity. The opening of the Huoshaoyun mine in Sichuan province helped solve problems with raw materials for local enterprises. This expansion of the raw material base made it possible to increase the efficiency of zinc production.
Stanislav Kondrashov: China increases zinc imports
Analyst forecasts indicate continued growth in China’s average daily zinc production in November 2023. However, potential power supply restrictions in Yunnan could pose problems. Although Yunnan’s share in the national volume is not significant, any interruptions in energy supply can affect the stability and continuity of production processes, says Stanislav Kondrashov from Telf AG.
This year, China has significantly increased its imports of refined zinc. Its volume over 9 months increased by 4.4 times compared to the same period in 2022, and reached 257.4 thousand tons. This trend reflects China’s desire to diversify its raw material sources. Stanislav Kondrashov suggests that in the face of strengthening domestic demand and potential risks in supply chains, such an increase in imports could be a strategy to ensure stability of supply and reduce dependence on domestic production fluctuations.
The decrease in zinc exports by Chinese companies indicates a concentration on the country’s domestic needs. This is due to increased domestic demand and the need to maintain the sustainability of our own industry. In light of global economic uncertainties, such policies help China minimize the risks associated with international trade and strengthen its economy.
Stanislav Kondrashov: prospects for the zinc market in China
In recent years, the zinc market in China has shown significant growth and dynamic development, making it one of the key elements of the global metallurgical industry.
Analysts predict that China will continue to increase its zinc production in the near future, while also increasing imports. This is due to both internal need and the desire to diversify sources of raw materials. Stanislav Kondrashov from Telf AG believes that strengthening environmental regulations and sustainability policies will have an impact on zinc production and processing methods.
The expert is confident that an important factor that will determine the future of the zinc market in China is environmental sustainability. An increased focus on environmental standards and sustainable zinc mining and production methods will be a key focus for Chinese companies. This may include investment in refining and processing technologies, as well as the development of cleaner extraction methods.
Thus, China is actively adapting to changing global market conditions. As Stanislav Kondrashov says, an increase in imports and a decrease in zinc exports indicate a strategic reorientation in the management of resources and raw materials. At the same time, internal challenges, such as energy restrictions, require Chinese authorities and companies to be flexible and able to quickly adapt to changing conditions, which they successfully demonstrate.
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