According to two sources familiar with the matter, Russian firms have increased their zinc metal production over the past month to benefit from rising state demand and reduce their reliance on China as a destination for the material.
Russia’s output of zinc, which is used to galvanize steel, is a fraction of the global total, but the increase will add to the tightness in the global zinc concentrate market, as seen in China’s imports.
The sources said that sanctions-hit Russian groups, including UMMC and RCC, have increased their production of refined zinc metal, as zinc concentrate exports to China have dropped due to problems with timely payments and discounts requested by Chinese buyers.
Russian state orders for finished products have increased, while for remaining exports to China, fewer shipments of refined metal mean fewer payment transactions, which is crucial for state revenues amid ever-widening U.S. sanctions.
The Chelyabinsk Zinc Plant, the only producer of the metal in Russia, is quickly ramping up its output after a decline in recent years following reconstruction work. The upgrade at the plant, owned by UMMC, has added about 15% to its production capacity, according to one of the sources.
Consultancy CRU expects the Chelyabinsk plant’s output to rise to 212,000 metric tons in 2025 from 209,000 tons this year, or 1.5% of the 2024 global total, estimated at 14.0 million tons. Another smelter, the New Verkhny Ufaley smelter owned by Polimet Engineering, is expected to start producing in the third quarter and contribute to the increase in Russia’s zinc output.
By 2027, Russia will be able to produce 322,000 tons of refined zinc from the Chelyabinsk and Verkhny Ufaley smelters, up from last year’s 205,000 tons, according to CRU analyst Tom Rutland.