China Zinc Concentrate Imports Hit 40-Month High in December 2014

SHANGHAI, Feb. 4 (SMM) –

Refined zinc
China Customs show China imported 17,500 mt of zinc in December 2014, down 71.44% YoY and 7.62% MoM. YTD imports through December were 570,000 mt, down 8.7% YoY.

China’s zinc imports fell to their lowest in 41 months in December as imported zinc reserves in the bonded zone remained high. The SMM/LME zinc price ratio was still short of the level necessary to spur imports, despite an improvement since late December. In addition, domestic zinc supply remained sufficient. SMM’s latest survey reports the average operating rate at domestic zinc smelters in December reached a new high for the year of 86.32%.

Zinc imports from Kazakhstan, India, Australia and Mexico were the highest in December, with 6,400 mt, 4,500 mt, 3,000 mt and 1,500 mt, respectively. Imports from other countries were low. Zinc imports from India increased 3.52-fold to 4,520.7 mt.

Zinc exports in December were 15,100 mt, up over 7.8-fold YoY, but down 48.16% MoM to a five-month low. Zinc re-exports decreased nearly 50% on the month due to improving SMM/LME zinc price ratio, which boosted zinc imports. Nonetheless, exports through 2014 reached a high 131,400 mt as the SMM/LME zinc price ratio in 2014 was relatively low, up 37-fold.

Zinc concentrate
China Customs show domestic zinc concentrate imports in December 2014 were 321,000 mt, up 46.17% YoY and 70.0% MoM, to hit a new low since September 2011. YTD imports through December were 2.20 million mt, up 10.6% YoY, and rising for the second straight year.

Loss on zinc concentrate imports contracted further in early November, or turned to profit some time, allowing smelters to increase purchases. The average loss on zinc concentrate imports in November was RMB 50/mt, down sharply from October’s average of RMB 300/mt. The price spread between imported zinc concentrate and domestic zinc concentrate was between -100-250/mt in November.

Zinc concentrate imports in December grew 132,000 mt, and 96,000 mt was from bonded zone inventories (including pilot areas under Customs supervision). Of the top 10 importers, 6 are zinc producers. Imports by Xiangyun Feilong increased 19,000 mt to 34,000 mt. Imports by Huludao Zinc Industry rose 13,000 mt to 33,000 mt. Imports by Zhuzhou Smelter Group climbed 19,000 mt to 32,000 mt. Imports by Nandan Nanfang Nonferrous Metals Smelting Company increased 11,000 mt to 31,000 mt. Shaanxi Zinc Industry imported no zinc concentrate in November, but imported 17,000 mt in December. Imports by Yuguang Zinc Industry grew 2,000 mt to 15,000 mt.

24 countries supplied zinc concentrate to China in December. Imports from Australia were the highest, up 65,000 on the month to 151,000 mt, representing 47.04% in the total imports. Imports from Peru were up 75,000 mt to 88,000 mt. Imports from Bolivia, Chile, Canada and Iran rose 32,000 mt MoM.