SHANGHAI, Nov. 24 -- China will re-export more zinc in coming months as price changes make shipping material overseas more profitable.
Exports of refined zinc amounted to just 4,347 mt in October, but that was up 143% month-on-month, and set against a sharp drop in imports, according to the latest customs data.
Traders say there have been no premiums offered for imports in months, and they are monitoring prices for export opportunities.
"We are looking closely at the price gap between Shanghai and LME zinc," said an arbitrage trader in Shanghai. "It's just daydreaming to think of making profits on zinc imports, but we are looking at the timing for re-exports in the coming weeks."
"With any further gains in the LME zinc price, it's quite likely we will see a positive gap for zinc exports," he added.
Imports of lead and zinc fell sharply in October, customs data suggested.
China imported 27,839 mt of refined zinc, down 21% month-on-month but 144% higher year-on-year.
Imports of refined lead fell by around half to 2,950 mt, while refined zinc imports were down 21% month-on-month to 27,839 mt.
The declines were expected, given the infrequency of import offers in recent months.
"I haven't heard of any CIF lead or zinc premium offers for months," said a physical trader in Guangdong province, southern China.
"Apart from some long-term contracts, I don't think there has been much buying in the last few months," he added.
High inventories of both lead and zinc in China, and easy availability from local warehouses, mean that buyers have no great need to look overseas for material.
Imports of lead and zinc ores and concentrates also dropped in October.
Customs said China imported 142,798 mt of lead ores and concentrate, down 13% month-on-month and 0.63% higher year-on-year.
Imports of zinc ores and concentrate were 337,098 mt, down 11% month-on-month and 25% higher year-on-year.
"Local supply has been ample, lowering demand for imported ores," said an analyst from Beijing Antaike Information Co.
"Also, domestic smelters and mines have got good stocks of the raw materials, so they are in no hurry to buy," he added.
Spot lead treatment charges (TCs) are quoted at USD 120/mt currently, but local smelters are asking for USD 150/mt, said an analyst in Shanghai.
(Source: Metal Bulletin)