Downstream purchases lower zinc social inventories

SHANGHAI, Sep 7 (SMM) – China’s social inventories of zinc shrank from Monday as of Friday September 7, as downstream consumers stepped up purchases when prices dipped in the middle of the week, and as some imports moved into invisible stocks. 

Stocks across the major markets of Shanghai, Tianjin, and Guangdong came in at 111,500 mt as of September 7, down 3,500 mt from Monday September 3, but up 2,400 mt from last Friday.

Downstream purchases decreased stocks by 4,000 mt in Shanghai and 1,200 mt in Tianjin from Monday. This accounted for the overall decline in social inventories. Imports grew in an open import arbitrage window that has remained open for three consecutive weeks, but some imports moved into invisible stocks.

SMM expects inventory to increase next week as smelters will deliver more cargoes when prices rebound.