China Zinc Industry Chain

Analysis, 2010-2011

What is Our Focus

• How will zinc prices move in the future, and what effects will the
speculative funds have on zinc prices?
• When will market fundamentals play a leading role in zinc prices, and
where is the turning point of struggles between market fundamentals
and speculative funds?
• What role will power restrictions policies play in zinc prices as the
deadline of energy efficiency target for the 11th Five-Year Plan period
is approaching?
• What is the current situation of downstream producers, and what is
their future?

SMM Metals carries out frequent surveys and consultation with key players
along China industrial chains, conveying to you price movement, alerting news,
statistics, in-depth analysis and well-based forecast etc, with the aim of helping
readers develop a better understanding of the real situation of Chinese zinc
industrial chain.

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 China Zinc Industry Chain Analysis, 2010-2011 Changes of Operating Rates in Zinc Downstream Industries 1H 2010

100%

Changes of Operating Rates in Zinc Downstream Industries 1H 2010

90%
100%
Background 80%

90%

China’s and overseas zinc markets showed 70%

80%
mixed performance in 2010. Zinc prices in China 60%

fluctuated lower after only extending gains during 70%

50%
the first week of 2010, especially in 2Q when 60% January February March April May June July
zinc prices dipped further in view of uncertainties
surrounding international markets as a result of 50%
Galvanizing industry Die-casting zinc alloy Battery
European debt crisis, China’s curbs on property January
Brass
February March April
Zinc oxide
May June July

markets, as well as negative impact on zinc Source: SMM

Galvanizing industry Die-casting zinc alloy Battery
consumption from restrictions on exports of "high-
Brass Zinc oxide
pollution, high-energy-consuming and resource- Source: SMM

dependent" products. However, significant

declines in zinc prices in 2Q 2010 were not Expansion Pace of China Zinc Capacity 2007-2010e

caused by market fundamentals, but were due Unit: 10 kt

mainly to unfavorable overseas and domestic 700
Expansion Pace of China Zinc Capacity 2007-2010e
20%
15.7%
economic conditions, since the speculative funds 10.7%
560 Unit: 10 kt 16%
and psychological factors played more important 700 11.3% 20%
role in zinc prices than market fundamentals. 420
15.7%
12%
Especially in 2H 2010 when zinc prices kept 560 10.7% 16%
11.3%
fluctuating higher, the linkage between zinc 280 8%
420 12%
prices and market fundamentals again weakened
gradually. 140
280
4%
8%

0 0%
Hot Topics 140 2007 2008 2009 2010e 4%

Review 0Source: SMM 0%

2007 2008 2009 2010e

SMM exclusive survey of downstream producers Source: Statistics of Output at China Major Zinc Smelters 2009-2010E
SMM
in 2010. What about productions at donwstream Unit: 10 kt

producers? How does zinc demand in view
of climbing zinc prices? What is the future of
downstream producers as consumption from
end-users fails to improve given rising zinc
prices? SMM conducts surveys of thousands of
downstream producers, and will show you detailed
analysis of various aspects of zinc downstream
industry in the annual report.
Ranking Company Name Output in 2009 Output in 2010
1 Zhuzhou Smelter Group
2 Huludao Nonferrous Metals Group
3 Henan Yuguang Gold and Lead Group
4 Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd.
5 Yunnan Jinding Zinc Co., Ltd. (Sichuan Hongda Group)
6 Yunnan Chihong Zinc & Germanium Co., Ltd.
7 Shaanxi Dongling Group

8 Baiyin Nonferrous Metals Co., Ltd.

China’s Central Government has implemented
policies to curb property markets, conserve
energy, and cut emissions in 2010. What
challenges and opportunities will zinc industry
face?
9 Chifeng NFC Kumba Hongye Zinc Smelting Co., Ltd.
10 Hanzhong Bayi Zinc Industry Co., Ltd
11 Xiangyun Feilong Industry Co., Ltd.
12 Bayannaoer Zijin Non-ferrous Metals Co., Ltd.
13 Shanxi Zinc Industry Group Shangluo Smelter

14 Yunnan Luoping Zinc and Electricity Co., Ltd.

Forecast 15 Liuzhou Liyin Metal Materials Co., Ltd.

16 Hechi Nanfang Non-ferrous Metal Smelt Co., Ltd.

Zinc price trends in 2011. Can zinc prices extend 17 Shuikoushan Non-ferrous Metal Co., Ltd.
gains in 2011? Will speculative funds still play a 18 Western Mining Co., Ltd.
leading role in zinc prices? 19 Liuzhou China Tin Group

20 Sichuan Xichang Heli Zinc Industry Co., Ltd.

Zinc supply and demand in 2011. Zinc stocks  Subtotal
remain high currently, and will the de-stocking  Total
activities appear in 2011? Source: SMM
 China Zinc Industry Chain Analysis, 2010-2011
Table of Contents
1. Macro Economy
1.1 Features of China Economic Operation 2010
1.2 Recovery Process of Major Foreign Economies
2010
1.3 Outlook of China and Global Economies 2011
2. Industry Overview
2.1 Overview of China Nonferrous Metal Industry
2.2 Overview of China Zinc Industry
3. Overview of Global Supply and Demand
3.1 Global Zinc Supply 2003-2010
3.1.1 Global Zinc Concentrate Supply
3.1.1.1 Distribution of Global Zinc Concentrate
3.1.1.2 Changes in Global Zinc Concentrate Output
2003-2010
3.1.2 Changes in Global Zinc Output 2003-2010
3.2 Changes in Global Zinc Apparent Consumption
2003-2010
4. Overview of China Supply and Demand
4.1 Supply
4.1.1 Zinc Concentrate
4.1.1.1 Distribution of China Zinc
Concentrate
4.1.1.2 Changes in Zinc Concentrate Output
4.1.1.2.1 Changes in China Zinc Concentrate
Output 2003-2010
4.1.1.2.2 Monthly Changes in China Zinc
Concentrate Output 2010
4.1.1.3 Zinc Concentrate Imports
4.1.1.3.1 Changes in China Imports of Zinc
Concentrate 2003-2010 4.3.1.2 Overview of Production at Zinc
4.1.1.3.2 Analysis by Customs Statistics
4.1.1.3.3 Analysis by Importing Country
4.1.1.4 Monthly Changes in China Imports of
Zinc Concentrate 2010
4.1.1.5 SMM Exclusive: Analysis of Survey
of China Zinc Concentrate
4.1.1.5.1 Distribution of Zinc Concentrate
Grade
4.1.1.5.2 Overview of Supplementary
Materials Used for Ore Mining and Dressing
4.1.2 Zinc Ingot
4.1.2.1 SMM Exclusive: Analysis of Survey
of China Zinc Smelters
4.1.2.1.1 Overview of Production at China
Zinc Smelters 2010
4.1.2.1.2 Comparison of Operating Rates
and Capacity at Major Zinc Smelters 2010
4.1.2.2 Changes in Zinc Capacity
4.1.2.2.1 Analysis of Changes in China Zinc
Capacity 2003-2010
4.1.2.2.2 Regional Distribution of China Zinc
Capacity
4.1.2.2.3 List of Newly-Expanded Capacity
2011
4.1.2.3 Changes in Zinc Output
4.1.2.3.1 Analysis of Changes in China Zinc
Output 2003-2010
4.1.2.3.2 Monthly Changes in China Zinc
Output 2010
4.2 Zinc Imports and Exports
4.2.1 Changes in Zinc Imports
4.2.1.1 Changes in China Zinc Imports
2003-2010
4.2.1.1.1 Analysis by Customs Statistics
4.2.1.1.2 Analysis by Origins
4.2.1.2 Monthly Changes in China Zinc
Imports 2010
4.2.1.2.1 Analysis by Customs Statistics
4.2.1.2.2 Analysis by Origins
4.2.2 Changes in Zinc Exports
4.2.2.1 Changes in China Zinc Exports
2003-2010
4.2.2.2 Monthly Changes in China Zinc
Exports 2010
4.3 Demand
4.3.1 SMM Exclusive: Analysis of Survey of
China Zinc Downstream Producers
4.3.1.1 Overview of SMM Exclusive Survey
of China Zinc Downstream Producers
Downstream Producers 2010
4.3.1.3 Monthly Changes in Production at
Zinc Primary Consumers 2010
4.3.2 Analysis of China Zinc Primary
Consumption Structure
4.3.2.1 Galvanized Products
4.3.2.1.1 Galvanized Plate
4.3.2.1.1.1 Monthly Changes in Galvanized
Plate Output 2010
4.3.2.1.1.2 Monthly Changes in China
Imports and Exports of Galvanized Plate
 China Zinc Industry Chain Analysis, 2010-2011

2010 6.2.5 Outlook of China Zinc Consumption

4.3.2.1.1.3 Apparent Consumption of 2011
Galvanized Plate 2010 6.3 Forecast of China Zinc Market Supply
4.3.2.1.2 Galvanized Structure and Demand 2011
4.3.2.2 Die-Casting Alloy 6.4 Forecast of China and Overseas Zinc
4.3.2.2.1 Monthly Changes in Zinc Alloy Prices 2011
Output 2010 6.4.1 Forecast of China and Overseas Zinc
4.3.2.2.2 Monthly Changes in China Imports Prices 2011
and Exports of Zinc Alloy 2010 6.4.2 Reference Factors in Zinc Price
4.3.2.3 Zinc Oxide Changes 2011
4.3.2.3.1 China Zinc Oxide Output 2010
4.3.2.3.2 Changes in China Imports and 7. Policy Analysis
Exports of Zinc Oxide 2010
4.3.2.3.3 Changes in Apparent Consumption 7.1 Industry Policies
of Zinc Oxide 2007-2010 7.2 Import and Export Policies
4.3.2.4 Battery
4.3.3 Analysis of China Zinc End 8. Industry Events
Consumption Structure
4.3.4.1 Construction Industry
4.3.4.2 Home Appliance Industry
4.3.4.3 Automobile Industry
4.3.4.4 Hardware Industry

5. Review of Zinc Prices 2010

5.1 Trading Features in Zinc Futures Markets

2010
5.1.1 London Metal Exchange (LME)
5.1.2 Shanghai Futures Exchange (SHFE)
5.2 Changes in Zinc Spot Markets 2010
5.2.1 Periodic Factors Affecting Zinc Spot
Prices 2010
5.2.2 Analysis of Zinc Cost
5.3 SMM Exclusive: Statistics of Spot Zinc
Traded Prices 2010

6. SMM Forecast of Zinc Market 2011

6.1 Global Zinc Market Outlook 2011

6.2 2011 China Zinc Market Outlook 2011
6.2.1 Outlook of China Zinc Concentrate
Supply 2011
6.2.2 Forecast of China Zinc Capacity
Growth 2011
6.2.3 Forecast of China Zinc Output
Changes 2011
6.2.4 Forecast of China Zinc Imports and
Exports 2011
6.2.4.1 Forecast of China Zinc Imports 2011
6.2.4.2 Forecast of China Zinc Exports 2011
 China Zinc Industry Chain Analysis, 2010-2011

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