IZA China Update
May 2013
Zinc Industry Overview China has become one of the most expensive countries for coal, coke, electricity, water, gas and other auxiliary materials. Labor costs are also rapidly rising. High operating costs, coupled with low treatment charges and depressed zinc prices made 2012 a very difficult year for many Chinese zinc smelters. China’s two biggest zinc smelters, Zhuzhou Smelter and Huludao, both incurred large deficits in 2012. Huludao’s deficit amounted to 3.7 billion RMB, while Zhuzhou reported a loss of 619 million RMB. As a consequence Huludao, which has incurred a deficit for three consecutive years, was delisted from the Shenzhen Stock Exchange. Zhuzhou is also facing the risk of being delisted from Shanghai Stock Exchange if they cannot reverse losses in 2013. Chinese zinc mining companies faired better than smelters in 2012, mainly as a result of by-product recovery including gold, silver and indium. Total zinc production in China during 2012 was 4.83 million tonnes - 7.5% lower than 2011 - marking the first year since 1983 that Chinese zinc production fell. The production of zinc concentrate was 4.93 million tonnes (zinc metal content). There was a minor import of zinc concentrate because Chinese companies could not get the bench price and treatment charges from the world market. Domestic
concentrate was relatively inexpensive and there were sufficient stocks. A number of Chinese zinc companies have expressed interest in direct negotiations with foreign mining companies and establishing long- term business relationships. To this end, IZA China and SMM (Shanghai Metals Market Information & Technology Company) organized a Chinese delegation of eight representatives from Chinese zinc smelters to attend IZA’s International Zinc and Zinc Oxide Conferences in February, 2013. The participants were pleased with the results and said they would attend this conference again.
2013 Zinc Market Forecast Based on presentations from two key IZA-sponsored conferences, CBI Metal Week (Shanghai, March11-13) and the SMM Lead and Zinc Summit (Shanghai, March 21-23), the potential for growth in China’s zinc demand during 2013 is encouraging. The Chinese Government is expected to invest in significant new infra-
structure projects, including high speed rail, high voltage and ultrahigh voltage power grids, wind energy, airport’s, highway’s and continued urbanization. These investments, and expanding capacity in the Chinese automotive industry is projected to add more than 2 million tonnes of zinc demand over the next 5 years.
Also in this issue: 2
Galvatech and AP Galva 2013 Announcement
2
GAP Meeting
2
Wind Energy
3
Zinc Die Casting
4
Galvanized Rebar
5
Update on PUP
5
Yau Sang Galvanizers joins IZA
5
Promotion of Zinc Fertilizers in China
Galvatech 2013 and AP Galva 2013, Beijing, Sept 23-27, 2013 Beijing will host the 9th International Conference on Zinc and Zinc Alloy Coated Steel Sheet (GALVATECH 2013) and the 2nd Asia-Pacific Galvanizing
ConferenceďźˆAP Galva 2013) in September 23-27, 2013. It is the first time GALVATECH will be held in China and with a program of 135 International and 69 Chinese
papers, the event will be one of the most significant gatherings ever of the Chinese steel and galvanizing industries. In addition to sponsoring and helping coordinate these events, Frank Goodwin, Director, TMD, will act as Co-Chairman of GALVATECH 2013. For more information, visit: http:// www.galvatech2013.com.
China Galvanized Autobody Partnership (GAP) meeting IZA organized the second meeting of its Chinese Galvanized Autobody Partnership (GAP) at the Wuhan Iron and Steel (Group) Corporation (WISCO) in March 2013. Delegates from China GAP member companies Baosteel, Ansteel and Peugeot Citroen were on hand to discuss the progress of ongoing research. One of the key action items from the meeting was to ensure the high-level of technology transfer of GAP research findings now occurring in Europe, Japan and North America also occurs within the Chinese auto industry. 2nd China GAP Meeting, March 18-19, 2013 Wuhan Iron and Steel Automotive R&D Center
Wind Energy
Global capacity is 238 GW in 2011
Wind energy capacity in China has increased from 3 GW in 2006 to 70GW in 2012. The Chinese Government is accelerating expansion plans and targets 104 GW by 2015 (equal to 3% of total electricity capacity in China), and 200 GW (5% of total electricity capacity) or more by 2020. This market offers enormous potential for zinc protection. IZA is promoting the use of zinc coating technologies including zinc rich paints and thermal spraying for wind energy applications at major zinc conferences, including the Antaike Annual Lead and Zinc International Conference, SMM Lead and Zinc Summit, and CBI Metal Week. IZA has also organized technical seminars for Chinese wind energy companies and established close contacts in this industry.
Dr. Frank Goodwin and Tony Tong from IZA China visit Titan Wind Energy Taicang, Jiangsu Province in China in March 2013. After the technical and market discussion they visited the thermal spray plant and the tower manufacturing unit of Titan. Titan is also in discussions with zinc-air manufacturer EOS Energy Storage regarding the suitability of the EOS system for storing energy from wind turbines
Zinc Diecasting IZA China provides technical support and market development aid to Chinese zinc die casting companies. In March, Frank Goodwin and Tony Lidong visited IZA member company -Xiamen Lota Group in Xiamen, Fujian province to discuss some process improvements at their new plant in Zhuhai, Guangdong. Lota is also building a high- level die casting research center, and hopes to cooperate with IZA on future zinc die-casting research aimed at enhancing the capabilities of the Chinese zinc die-casting industry.
IZA China has partnered with China Die Casting Web to jointly sponsor the 2013 Shanghai Automotive Diecasting Exhibition in conjunction with the First Precision Die Casting Exhibition. This event, planned for November 1, 2013, represents the first automotive diecasting exhibition in China. China National Auto and Auto Parts Export Base (Shanghai) and Shanghai International Automotive City will play host to the exhibition.
Continuous Coating for Galvanized Rebar On March 25th, IZA signed a cooperative Memorandum of Understanding (MOU) with Xiamen Newsteel and the Amoy Institute of Technovation (AIT) to further develop and promote the continuous coating process for galvanized rebar in China. The AIT is a Xiamen government body under the administration of Xiamen Science and Technology Bureau, and Mr. Sheng Xianhuang, the Director of Xiamen Science and Technology Bureau, hosted the
ceremony. Other attendees at the signing ceremony were: Mr. Xu Wendong (the Secretary-General of Xiamen City Government), Mr. Zhang Quan (the Deputy Head of Haicang District People’s Government), Prof Chen Guangzhang, the Chairman of CSCP (China Society for Corrosion and Protection), and Mr. Chen Qiwen, the Chairman of Taiwan Hot Dip Galvanizing Association, among others. A new Cross-Straits Joint Research Institute of New Protection
Material (CSJRINPM) has been established to develop the duplex coating rebar in cooperation with IZA, Newsteel, CSCP and Taiwan Galvanizing Association. Local Government has also pledged strong support for the project. The signing ceremony was reported by Xiamen TV Channel 1, Xiamen Daily, and Cross-Strait News.
The Signing Ceremony Front (left to right): Frank Goodwin, Miss Zheng Jingjing, Dean of Cross-Straits Joint Research Institute of New Protection Material, Mr. Lin Zhijian, Vice Director of AIT; Back (left to right): Mr. Chen Qiwen, Chairman of Taiwan Hot Dip Galvanizing Association, Prof Chen Guangzhang, Chairman of CSCP; Prof Xiao Jimei, member of Chinese Academy of Sciences; Mr. Xu Wendong, SecretaryGeneral of City Government; Mr. Zhang Quan, Deputy Head of Haicang District People’s Government; Mr. He Fangyuan, Secretary-General of Taiwan HDGA; Prof Li Xiaogang, Secretary-General of CSCP
Other Progress on Galvanized Rebar
Left: the enterprise standard. Above: Laboratory equipments
A Chinese Provincial standard for hot-dip galvanizing of rebar in a zinc-aluminum alloy bath has been published. Laboratory capabilities to support galvanized rebar development in China have been established at the South China University of Technology (SCUT). Testing of rebar to support this new market continues to be carried out in the laboratory at SCUT.
Update: IZA/CFC Galvanizing Plant Upliftment Program (PUP) The multi-year CFC-PUP project designed to advance capability in leading Chinese galvanizing plants is scheduled to finish in 2013. The PUP program involved four plants, with Guangdong Disheng and Shangdong Qixing, having started the ITT training segment in this Quarter.
Yau Sang Galvanizers (Hot Dip) Co., Ltd. Joins IZA IZA welcomes Yau Sang Galvanizers (Hot Dip) Co., Ltd, based in Hong Kong as a new affiliate member. Yau Sang is interested in participating in the CFC- PUP program and promoting galvanized rebar in Hong Kong. Yau Sang was recently approached by the High Speed Train (HK Section) for an order of 2,000 metric tons of galvanized rebar - pre-bent and hot-dipped. This represents the first time galvanized rebar has been specified in a Hong Kong railway project.
Promotion of Zinc Fertilizers in China More than 150 agricultural researchers, extension professionals and fertilizer industry leaders attended a workshop co-organized by IZA and China National Agricultural Technology Extension and Service Center (NATESC) in Hangzhou China in March. During the conference, delegates learned the latest results from the joint ongoing zinc fertilizer project. In 2012, zinc fertilizer increased crop yields by an average of 8.4% in 24 field trials and 46 demonstration plots in 14 provinces. Zinc fertilizer also increased Zn concentrations in grains from 15%
to 50%, with variations attributed to differing crops, zinc fertilizer application rates and methods. In addition to increasing yield and grain concentration, zinc fertilizer also increased economic returns in all tested crops with a benefitto-cost ratio ranging from 10 to 19 Yuan for grain crops to a high of 130 Yuan for vegetable crops. Zinc fertilizer application by the fertigation method achieved the highest increase in yield and economic returns. For more information, please contact Dr. Ming Fan at mfan@zinc.org.
IZA’s second annual “Zinc Week” will be held in Shanghai on November 1719, 2013. The focus of this year’s effort will be technical and market aspects of Zinc Oxide. Last year’s event was held in Guandong and focused on galvanizing and zinc production.
Zinc Fertilizer Workshop Hangzhou, China , March 4-5, 2013 Pictured Left to Right: Dr. Gao Xiangzhao, MOA; Mr. Huang Guoyang; Mr. Wang Jindeng, MOA; Mr. Hang Dapeng, MOA; Mr. Chen Lijiang; Dr. Andrew Green, IZA; and Dr. Ming Fan, IZA.
Further information will soon be available on our website at http://www.zinc. org/about/events_ conferences.