SHANGHAI, Sept. 31 (SMM) –
China imported 218,800 mt of zinc concentrate in September, the second highest for the year, up 51.94% MoM and 84.72% YoY. YTD imports through September were 1.47 million mt, down 0.35% YoY.
The SHFE/LME zinc price ratio rallied to 7.3 in September, causing import losses to narrow to RMB 600/mt (zinc content). Despite sufficient domestic zinc concentrate supply, domestic zinc concentrate output growth slowed this year. Moreover, Chihong Zn & Ge will put 140,000 mt/yr zinc capacity into production at its Hulun Buir branch this year, causing domestic demand for zinc concentrate to increase. As such, zinc imports grew in September.
The number of source countries in September increased to 18. Imports from Australia, Peru and Mongolia were the highest, with 191,200 mt, which accounts for 87.4% in the total. Imports from Australia rose 57.67% MoM, imports from Peru were up 18.99% MoM, and those from Mongolia leapt 367.96%.
China Customs reports zinc imports in September were 28,800 mt, down 52.39% YoY and 50.93% MoM. YTD imports through September were up 22.58% YoY to 508,500 mt.
China's zinc imports hit a new low over the past 14 months in September due mainly to the low SHFE/LME zinc price ratio. The ratio hovered between 7.1-7.3 during August and September, leaving import losses around RMB 1,000/mt. This depressed importers. In addition, the average operating rate at major domestic zinc smelters during August and September remained high between 77-78%, which undermined demand for imported zinc.
Imports from Kazakhstan, Australia, North Korea and South Korea were the highest, with 19,800 mt, 2,600 mt 2,000 mt and 1,300 mt, respectively. Excluding the 3,400 mt of #1 zinc imports from Kazakhstan, #0 zinc imports were only 9,000 mt, lower than September's exports.
China's zinc exports surged over the past few months. Exports in September reached 25,400 mt, jumping 486-fold YoY. Exports during the first nine months totaled 61,300 mt, up 18.2-fold. SMM attributes the surge in exports to the finance-driven imports scam, high storage charges and cash flow tightness. Most exports were from bonded zone inventories.