High losses lower China's refined zinc imports in Jun

SHANGHAI, Jul 29 (SMM) – China imported 56,800 mt of refined zinc in June, down 4.09% from a month ago but up 56.76% from a year ago, showed the latest data from China Customs.

Long-term contracts continued to contribute to most of the imports in June, with materials from Australia, South Korea, and Kazakhstan taking up some 94% of the total imports. 

Despite moderation, high import losses prevented the influx of seaborne materials on the month in June. Price ratio of SHFE/LME zinc averaged 7.89 in June, up from May’s 7.7, and this narrowed import losses by 380 yuan/mt, to 1,230 yuan/mt. 

Short squeeze in Shanghai zinc buoyed the ratio of SHFE/LME zinc prices once above 8 and reduced import losses to 1,000 yuan/mt in June, but the ratio slid swiftly after the delivery for SHFE June contract. 

In July, imports of refined zinc are expected to flat from June as slow season consumption and sufficient domestic supplies may continue to depress import enthusiasm across traders. This is despite of continued narrower import losses, standing at 300-500 yuan/mt, after a collapse in the premium for cash zinc over the three-month contract on LME, which pointed to a better-supplied market. 

Separately, China's exports of refined zinc, mainly 0# zinc, climbed to the highest this year at 8,600 mt in June, compared with 3,700 mt in January-May. Malaysia, Vietnam, Bangladesh, and India are the top export destinations in June. 

Record-high exports brought net imports in June to 48,300 mt, down 17.8% from May.