What’s Impact on China Base Metals from Embargo on North Korea? SMM Reports

SHANGHAI, Dec. 27 (SMM) - China bans imports of copper, nickel, zinc and silver from North Korea starting December 24, 2016, the Ministry of Commerce said on its website. But imports of goods that had been delivered or arrived at Chinese ports before the embargo took effect are allowed.

As a large importing country of metals, what’s impact on China’s metals markets from the ban?

Zinc

SMM learned North Korea was the third largest zinc ore and concentrate supplying country to China this year. Zinc ore and concentrate imports from North Korea totaled 103,000 tonnes during January-October, accounting for 7% of national total. Over 50% of these imports were shipped to trading companies in Liaoning’s Dandong. Some zinc concentrate imported from North Korea was shipped to smelters in Northeast China.

North Korea exported about 13,000 tonnes of refined zinc to China during January-October, which claimed 3.4% of China’s total refined zinc imports in the same period. These goods were mainly #2 zinc available in Shanghai. The new decision will only give limited effect on China’s spot zinc supply since the country is now a major refined zinc supplying country to China.

But the new decision will further tighten China’s zinc concentrate supply in the near term since domestic zinc concentrate supply will remain tight by Q1 2017, SMM said.

Copper

China imported 34,000 tonnes of copper concentrate and 2,000 tonnes of refined copper from North Korea in 2015, according to China Customs. In the first eleven months of 2016, China imported 2,246 tonnes of refined copper and 46,000 tonnes of copper concentrate from North Korea. But this is only a small proportion compared to China’s over 3 million tonnes of refined copper imports and 13 million tonnes of copper concentrate imports each year. So any impact from the embargo will be limited, SMM said.

Nickel

China’s refined nickel imports from North Korea are extremely low. Import volume from the country was 37.8 tonnes in 2014, 10 tonnes in 2015 and 22 tonnes in the first ten months of 2016. As China’s refined nickel imports totaled hundreds of thousands tonnes each year. The embargo will barely affect China’s nickel market. 

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