Ongoing Drought Jeopardizing Non-Ferrous Metal Production in SW China

Xinhua. The ongoing drought in southwest China’s Guangxi Zhuang Autonomous Region has caused non-ferrous metal output to plunge, and may bring it to a complete stop if the dry weather continues.

In Nandan County, with more than 11 million tonnes of verified non-ferrous metal reserves, companies had cut production by 30%, said Miao Zhilong, head of the county’s economic and trade bureau, said that companies in Nandan County have cut production by 30%.

“If the drought continues for another month, they are very likely to suspend production,” Miao said. The non-ferrous metal industry, despite its high power and water consumption, had long been a major contributor to the economy in Guangxi and neighboring Guizhou and Yunnan provinces, he said. “We estimate that local revenues in Nandan will drop 25 percent in April year on year.”

A major manufacturer of electrolytic zinc in China, the Nanfang Non-ferrous Metal Smelting Co., Ltd., in Hechi City, has shut down two production lines at its zinc plant this year. “We need 20 tonnes of water to electrolyze 1 tonne of zinc. Since March, our daily water supply has shrunk from 10,000 cubic meters to 3,000 cubic meters and our daily output has dropped by 40 percent from 600 tonnes to 380 tonnes,” said plant director Yang Youping.

Zhu Rujun, a senior investment consultant with China Merchants Securities Co., Ltd., said that the drought and resulting cutbacks will not cause a significant fluctuation in global non-ferrous metal prices, as the curtailed regions account for only a small proportion of China’s total non-ferrous output.