Zinc Concentrate Imports Increased MoM in April, What About May? [SMM Analysis]

According to the latest customs data, in April 2024, zinc concentrate imports were 287,400 mt in physical content, up 17.68% MoM (43,100 mt in physical content) but down 10.22% YoY. Cumulative zinc concentrate imports from January to April were 1.1788 million mt in physical content, down 23.62% YoY.

By country, in April 2024, the top three supplier countries for imports were: Peru (60,900 mt in physical content, 21.20%), Australia (56,200 mt in physical content, 19.55%), and South Africa (37,800 mt in physical content, 13.15%). On a monthly basis, significant increases in imports were seen from Peru, Australia, South Africa, Mongolia, and Oman, while imports from Indonesia and the Dominican Republic decreased to varying degrees.

SMM believes the reasons for the MoM increase in zinc concentrate imports in April are as follows:

1. In April, there were fewer disruptions in overseas mine production, and some mines affected in March resumed production, leading to an increase in output and impacting domestic ore imports.

2. In April, domestic zinc smelters faced a shortage of raw materials, and the continuous decline in domestic and international processing fees reflected the tight supply of ores, leading to increased import demand.

3. Some smelters' long-term contracted goods were gradually arriving at ports, also contributing to the increase in imports.

Therefore, although the import window for ores remained closed in April, the previously-ordered goods, together with the ongoing tight supply of domestic ores, led to strong demand for raw materials from smelters, resulting in higher import volumes.

In May, the import window for ores remained closed at the beginning of the month. However, with zinc prices remaining high and minor metals compensating for losses, SMM expects refined zinc production to increase MoM in May. Currently, the number of days of raw material inventory at smelters has dropped to historical lows, and the strong demand for raw materials is likely to continue to support the inflow of overseas ores into the domestic market. Additionally, some smelters' long-term contracted goods will continue to arrive at ports, potentially leading to a further recovery in zinc concentrate imports in May.