Zinc imports to weigh on domestic prices as import arbitrage opens

Published: May 3, 2018 16:22

Save

An inflow of imported zinc is likely to weigh on domestic prices following the arbitrage window opened in May.

SHANGHAI, May 3 (SMM) – An inflow of imported zinc is likely to weigh on domestic prices after the arbitrage window opened in May.

Several factors contributing to the opening of the arbitrage window include a delivery of 56,500 mt into LME warehouses last month, a declining social inventory in China amid the high season, and the value-added tax (VAT) cut in China. This has led the SHFE/LME price ratio to rise.

Small amounts of zinc including materials from Australia, South Korea and Spain were heard in the Shanghai market on Thursday May 3, as import losses have narrowed to just 50-70 yuan/mt last night.

Offers of these materials were mostly about 30 yuan/mt below those of the domestic 0# common brand. It takes about a week for imported zinc to be delivered from bonded areas.

However, spot trading was thin on Thursday as buyers held back due to sufficient supply and high spot premiums. The 0# common brands were heard traded at a premium of 210-230 yuan/mt over the SHFE 1806 contract, while Shuangyan traded at premiums of 220-250 yuan/mt.

For editorial queries, please contact Daisy Tseng at daisy@smm.cn
For more information on how to access our research reports, please email service.en@smm.cn

zinc imports

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

9 hours ago

Data: SHFE, DCE market movement (Mar 09)

The following table shows the ferrous and nonferrous metals movement on the SHFE and DCE on 09 Mar , 2026

9 hours ago

17 hours ago

Zinc Prices Maintain a Fluctuating Trend; Focus on Domestic Social Inventory Performance [SMM Zinc Morning Comment]

[SMM Zinc Morning Comment] Last Friday, the most-traded SHFE zinc 2604 contract opened at 24,350 yuan/mt. At the beginning of the session, SHFE zinc fluctuated downward, dipping to below 24,220 yuan/mt. Subsequently, bears reduced their open interest, and the center of SHFE zinc moved higher, touching above 24,370 yuan/mt. It finally closed at 24,330 yuan/mt, up 70 yuan/mt, or 0.29%. Trading volume fell to 58,655 lots, and open interest decreased by 932 lots to 84,384 lots.

17 hours ago

Weak Non-Farm Payrolls Data; LME Zinc Posted a Bullish Candlestick [SMM Morning Meeting Minutes]

[SMM Morning Meeting Minutes: Weak Non-Farm Payrolls Data; LME Zinc Posted a Bullish Candlestick] Last Friday, LME zinc opened at $3,240.0/mt and dipped to $3,221.0/mt in early trading. It then saw its center fluctuate upward at a slow pace. After entering the night session, it accelerated higher and touched a high above $3,343.0/mt, finally closing up at $3,323.0/mt, up $93/mt, a gain of 2.88%. Trading volume increased to 121,000 lots, while open interest fell by 516 lots to 219,000 lots.

17 hours ago