SHANGHAI, Jun. 7 (SMM) - Discounts of imported zinc over domestic zinc expanded on June 6. Prices for Indian and Spanish #0 zinc were 120-100 yuan per tonne below June zinc on the SHFE, and those for SMC, AZ and YP #0 zinc were 70-60 yuan per tonne below June zinc on the SHFE, with discounts of imported zinc widening 100 yuan per tonne over SHFE June zinc, SMM data showed.
The price spread between imported and domestic zinc widened due to two reasons. First, more inflows of imported zinc were seen due to import profit. The SMM/LME zinc price ratio rose from 8.4 in May to 8.6, leading to import profit over the past two weeks. In this context, Shanghai and Guangdong witnessed continuous inflows of imported zinc, expanding the price spread between domestic and imported zinc.
Besides, among available imported zinc brands, only AZ zinc is deliverable brand on the SHFE. But some AZ zinc is not qualified for delivery at present due to packing reason. Imported zinc supplies are ample, while domestic zinc available is limited. Premiums of Shuangyan #0 zinc were 160-180 yuan per tonne over SHFE front-month zinc, and premiums of regular deliverable #0 zinc were yuan per tonne over SHFE front-month zinc.
Arriving shipments of imported zinc were about 5,000 tonnes and 1,000 tonnes in Shanghai and Guangdong this week, slightly higher than last week, SMM said.
With additional influx of imported zinc, domestic zinc prices will face downward pressure in the near term.
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