SMM Analysis On China July Zinc Concentrate Imports And August Forecast

According to the latest customs data, zinc concentrate imports in July 2024 were 375,400 mt (physical tons), up 39.27% (105,800 physical tons) MoM from June, down 4.71% YoY. From January to July, the cumulative zinc concentrate import volume was 2.0905 million mt (physical tons), down 21.76% YoY.

By country, in July 2024, the top three sources of imports were Australia (79,400 mt, 21.16%), Peru (74,100 mt, 19.74%), and Bolivia (35,800 mt, 9.54%). MoM, significant increases were observed in Australia, Peru, Bolivia, Kazakhstan, and Russia, while South Africa, Eritrea, and Mexico saw varying degrees of reduction in inflows into China.

SMM believes the significant increase in zinc concentrate imports in July is due to the following reasons:

1. Supported by SHFE/LME price ratio, the import window for zinc ore remained open, leading to continuous inflows of overseas zinc concentrate;

2. With the continuous decline in domestic ore TC, domestic ore lost its price advantage, and amid the sustained tightness in domestic ore supply, smelters increased their procurement of imported ore.

In July, the SHFE/LME price ratio continued to rise, and some traders increased their import offers. Domestic smelters continued to procure and arrange imported ore for Q3 and Q4. Coupled with the arrival of previously ordered imported ore, zinc ore imports in August are expected to remain high.