SHANGHAI, Jan. 8 (SMM) - China has seen decreased inflows of imported zinc recently due mainly to rising import cost and soft demand.
The recently big devaluation of the yuan has led to higher import cost. The central parity of the yuan against the US dollar fell 2% from early December, with offshore yuan down below 6.7. Import profit reversed to losses of 50-100 yuan per tonne.
SMM understand zinc demand weakened in January, leaving #0 zinc 100-50 yuan below March zinc on the SHFE. When combined with ample spot supply, total inventories in Shanghai, Tianjin and Guangdong climbed to above 300,000 tonnes. Strict requirements on L/C issue also dampen imports.
“Lower inventories in Chinese bonded zone, resulting from previous large inflow of bonded zone inventories, are also attributable to falling inflows of imported zinc,” an SMM zinc analyst added.
As of Thursday, discounts of imported #0 zinc narrowed from early December’s 100 yuan to below 50 yuan per tonne against the average domestic zinc price.
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