Severe Import Losses to Undermine China’s Refined Zinc Imports in March

SHANGHAI, Apr 18 (SMM) – SMM expects China’s refined zinc imports in March to fall from February as the import losses remained above 1,500 yuan/mt, even after the SHFE/LME zinc price ratio had improved. The decline was limited, though, thanks to stable inflows from Kazakhstan under long-term contracts.

In March, the bankruptcy of Silicon Valley Bank and the subsequent credit turmoil of Suisse Bank triggered fears of global liquidity issues and systemic financial risks. Surging risk aversion hammered the commodity market. In terms of fundamentals, with the drop in natural gas prices, some overseas zinc smelters gradually resumed their production. Overseas premiums fell rapidly to around $300/mt, indicating that consumption weakened significantly.

Due to recovering Chinese market and overseas economic recession, SHFE zinc prices performed better than LME zinc prices.