Analysis of Impact on China Zinc Market from Establishment of China-Peru FTA

SHANGHAI, Mar. 5 (SMM) -- The China-Peru Free Trade Agreement took effect on March 1st, 2010. At present, China is the second-largest commercial partner of Peru, and Peru is China's seventh-largest commercial partner in Latin America. Statistics show that there are more than 1,000 enterprises in Ningbo city exporting goods to Peru in 2009, with goods including chemical and machinery products, textiles and garments, iron and steel, and electronics, and with the export value of over USD 90 million.

As to zinc market, zinc concentrate enjoys no import tariff in China, and only refined zinc enjoys the import tariff of 3%, and China's imports of refined zinc from Peru will become easier after China-Peru free trade pact takes effect. According to China Customs, China's imports of refined zinc from Peru were 3,214 mt in 2009, accounting for 0.48% of China's total imports, with most goods imported from March to May in 2009 when SHFE/LME zinc price ratio was above 9.0. In this context, although refined zinc imported from Peru enjoys tariff reduction compared with other regions, China's imports of refined zinc will still mainly depend on the SHFE/LME zinc price ratio, and if the ratio remains high, Peru's exports of refined zinc to China will grow significantly in 2010. 

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