London 15/08/2016 - All the zinc and lead mines in Huayuan County, China were ordered to halt production on Monday for safety inspections, according to news posted on the local government’s official website today.
The suspension period is scheduled to last until to June 2017, it added.
Annual zinc concentrates output from Huayuan County, one of the main zinc mining zones in the south of China, is estimated around 150,000 tonnes, accounting for around three percent of the total output in the country, according to market participants.
“The supply [of zinc concentrates] in the south [of the country] is tight already, and the halt will intensify the tightness,” a smelting source in China said.
Most Chinese smelters have relied on domestic supply this year, due to low overseas treatment charges (TCs) and unfavourable arbitrage.
“The suspension is absolutely not good news for all Chinese smelters, but the actual impacts have yet to be seen,” a second local smelter told Fast Markets.
(Editing by Martin Hayes)