According to Customs data, China’s zinc concentrate imports in June 2023 were 390,600 mt (physical content), an increase of 13.49% month-on-month, and a year-on-year increase of 33.16%. YTD import volume of zinc concentrate through June was 2.2782 million mt (physical content), an increase of 25.36% year-on-year.
In June 2023, the top three supplier countries were Australia with 74,200 mt, accounting for 19%; Peru with 74,100 mt, accounting for 18.98%; South Africa with 64,700 mt, accounting for 16.56%. Zinc imports from South Africa and Peru increased significantly.
SMM attributes the increase in zinc concentrate imports to the following factors.
1. The SHFE/LME zinc price ratio stood at high levels, keeping the import window open. This drove the inflow of overseas zinc concentrates.
2. Although domestic smelters reduced production in June, the reduction was lower than expected. The zinc output in June remained at a high level of 552,500 mt, ensuring strong demand for zinc concentrate.
3. Despite lower TCs of imported zinc concentrate, domestic zinc smelters could still secure profit of 400 yuan/mt using imported zinc concentrate. Imported cargoes were thus more desirable compared to domestic zinc concentrate, leading to high raw material inventories.
In July, the imports of zinc concentrate were still profitable on the back of the high SHFE/LME zinc price ratio. However, considering that the smelters enter the intensive maintenance period from July to August, the demand for ore should fall. And the import of zinc concentrate will decrease slightly.
