Zinc social stocks in Shanghai down on week amid outflows, limited arrivals

SHANGHAI, Nov 30 (SMM) – Social stocks of refined zinc in Shanghai lost some 13,000 mt, or 23.2%, between Monday and Friday as a closed import arbitrage window limited seaborne arrivals and as a six-day losing streak in SHFE zinc earlier in the week deterred domestic smelters from letting their cargoes go.

Price spreads between Shanghai and Guangdong widened to 230-300 yuan/mt this week, which prompted traders to move cargoes to Guangdong from Shanghai. This, together with strong purchasing enthusiasm among downstream consumers, also helped lower stocks in Shanghai.

As of Friday November 30, social inventories of refined zinc in Shanghai stood at 43,000 mt, down 13,000 mt from Monday November 26, SMM data showed.

During the same period, stocks in Guangdong decreased by 2,600 mt, or 23.4% to 8,500 mt as Shanghai cargoes have yet to arrive at warehouses or directly entered downstream consumers, which failed to offset the losses triggered by downstream purchases.

Brisk domestic arrivals and stable downstream purchases kept stocks in Tianjin steady. 

Social inventories of refined zinc across Shanghai, Guangdong and Tianjin came in at 111,000 mt as of Friday November 30, down 15,300 mt from Monday November 26 and 14,200 mt from Friday November 23, SMM data showed.

Inventories are likely to nudge up next week if purchasing interest among downstream consumers wanes from this week and if more seaborne materials arrive.