(Minews) - China’s zinc smelters are moving away from importing concentrates and are instead focusing on developing domestic mines, an executive at Chinese research company Antaike said.
Feng Juncong told the International Zinc Assn (IZA) conference in Dana Point, California that Inner Mongolia is one region that has seen zinc mine projects accelerate since 2007.
“Refined zinc imports will stay at a high level but concentrate imports will slip,” Feng said.
He forecast an extra 300,000 tonnes of concentrates output in China between 2013 and 2015.
In 2013, Chinese zinc concentrates output reached 4.73 million tonnes of contained metal.
Higher zinc concentrates demand in China has stimulated investment in exploration, Feng said.
“Domestic mine production had for years failed to meet demand from smelters, but the reliance on imports eased after 2009 as concentrates supplies were not so tight and domestic mine output rose,” he added.
The silver-rich zinc concentrates that China imports are often loss-making for smelters, Feng said, while fluctuating prices and low operating margins means companies prefer to use domestic raw materials.
Smelting capacity is operating on a low utilisation rate in China, Feng noted.
“Smelters have very thin profits. When the price slips such as in 2012 and 2013, smelters - especially the big ones - are forced to cut production, reducing deliveries to the market,” he said.
A pick up in prices would stimulate a pick up in production, he added.
