Weak consumption lowers zinc imports in Jan

SHANGHAI, Mar 7 (SMM) – China’s imports of refined zinc shrank from a month earlier in January as downstream consumption weakened ahead of the Chinese New Year holiday, which began from February 4 this year.

According to the latest data from the Customs, about 69,200 mt of refined zinc imports entered China in January, down 26.23% from December but up 3.11% from January 2018.

Belgium, followed by Kazakhstan, Spain, Australia and South Korea, are the top five exporters of refined zinc to China in January.

The decline in zinc imports in January occurred despite recovered import profits. The import arbitrage window for refined zinc opened in January after closed for over two months. This, together with domestic supply constraints and narrower backwardation structure on the LME widened the profits that zinc importers can see.

With the higher SHFE/LME zinc price ratio, profit margins on zinc imports reached about 500 yuan/mt in January.

Profits on zinc imports fell back into negative territory in February as holiday impact grew domestic inventories while stocks across LME-registered warehouses declined towards record lows. This is set to result in a drop in imports of refined zinc for the month.