China Zinc Concentrate Imports Hit 40-month Low in November 2014

SHANGHAI, Jan. 26 (SMM) –

Refined zinc
China Customs data show zinc imports in November was 18,900 mt, down 74.36% YoY and 24.43% MoM. YTD imports through November were 552,500 mt, down 1.87% YoY.

China's zinc imports hit a 40-month low in November. The SMM/LME zinc price ratio improved to 7.51, but import losses remained between RMB 200-800/mt, which depressed importers.

Ample domestic zinc supply also curbed zinc imports. SMM survey shows the average operating rate at domestic zinc smelters hit a record for the year at 83.88% in November.

Kazakhstan, Australia, Peru and India topped the list of China's imported zinc suppliers in November, with 11,400 mt, 3,400 mt, 1,500 mt and 900 mt, respectively. On the export side, China's zinc exports in November reached 29,200 mt, up 134-fold YoY, and 13.35% MoM, hitting a record since March 2007. YTD exports through November totaled 116,200 mt, up 33-fold YoY. China returned to being a net exporter of zinc in November with a net 10,300 mt outflow, most of which flowed to LME warehouses in Malaysia, the Netherlands, India and Taiwan (China) from China's bonded zone inventories.

Zinc concentrate
China Customs reports China imported 189,100 mt of zinc concentrate in November, up 37.88% YoY, and a high level during 2014, though the import volume was down 14.98% on the month. YTD imports through November were 1.88 million mt, up 6.13% YoY.

SMM attributes the high import volume of zinc concentrate in November to three reasons. First, TCs for imported zinc concentrate have been on the rise since the start of 2014. TCs for imported zinc concentrate were USD 190-210/dmt in November, up USD 10/dmt from October.

SMM learned that high zinc concentrate inventories at ports, combined with expensive storage and interest rate cost and year-end cash tightness, forced cargo holders to raise their quotes.

Second, the SMM/LME zinc price ratio has improved since September, rising above 7.5 in early November. This reduced losses of imported zinc concentrate to RMB 30/mt (zinc content).

Third, domestic demand for zinc concentrate is strong. SMM survey shows the average operating rate at major domestic zinc smelters have stood above 75% since June, with 83.88% in November, the highest monthly average for the year.

China imported zinc concentrate from 19 countries in November, with Australia, Peru and Bolivia topping the list. Combined imports from the three countries were 159,600 mt, representing 84.4% of China's total imports. Imports from Australia in November jumped 112.92% YoY; imports from Peru were up 33.91% YoY, and imports from Bolivia soared 943.22% on the YoY basis.

Shaanxi Dongling Industry & Trade Group, Huludao Zinc Industry Company and Yuguang Zinc Industry Company imported no zinc concentrate in October, but imported 22,000 mt, 20,000 mt and 13,000 mt, respectively, in November, ranking 1st, 2nd and 5th among zinc concentrate importers. Imports by Yunnan Xiangyun Feilong Resources Recycling Technology Company fell 76.2% MoM, to 15,000 mt. Imports by Zhuzhou Smelter Group were down 48.2% MoM to 12,000 mt. Shenzhen Zhongjin Lingnan Nonfemet and Hanzhong Zinc Industry Company imported 10,000 mt and 9,000 mt of zinc concentrate, respectively, in October, but imported no zinc concentrate in November.