SMM analysis on China May zinc concentrate imports and June forecast

According to the latest customs data, zinc concentrate imports in May 2024 totaled 266,700 mt in physical content), down 7.21% (20,700 mt in physical content) MoM and down 22.50% YoY. From January to May 2024, cumulative imports amounted to 1,445,600 mt in physical content, down 23.41% YoY.
In May 2024, the top three sources of zinc concentrate imports were Peru (55,600 mt in physical content, 20.86% of total), Australia (44,800 mt in physical content, 16.81%), and Kazakhstan (30,400 mt in physical content, 11.38%). MoM data shows significant reductions in imports from Peru, Australia, South Africa, and Mongolia. Conversely, imports from Kazakhstan, Saudi Arabia, and Chile saw varying increases.
SMM attributes the decrease in zinc concentrate imports in May to several factors:
1. The continued closure of the domestic import window for zinc throughout May meant that arriving shipments were mostly pre-ordered goods, leading to no significant increase in zinc concentrate imports.
2. Despite domestic mine scarcity, low TC quotations for imported ore led smelters to prefer domestic ore due to its cost advantage.
3. International mines experienced declining ore grades and weather disruptions, limiting supply increases. Additionally, international zinc smelters resumed operations to maintain production, further restricting the inflow of overseas zinc ore into the domestic market.
Although the import window for zinc ore opened in June, high demand from overseas smelters and shipping schedules mean that most arriving shipments likely consist of previously placed orders. Additionally, low TC quotations for imported zinc ore and ongoing price factors mean no significant improvement in zinc ore imports is expected for June.