SHANGHAI, Dec 27 (SMM) – China’s imports of zinc concentrate rebounded in November to the highest level so far this year as restocking demand from domestic smelters surged amid an open import arbitrage window and high treatment charges.
A total of 354,100 mt of seaborne zinc concentrate entered China in November, 104,000 mt higher than a month earlier and 50,200 mt higher than a year ago, showed the latest data from China Customs.
China's imports of zinc concentrate (Source: China Customs, SMM)
Australia remained the top supplier, with zinc concentrate imports from the country taking up 33.9% of the total in November, standing at 120,000 mt.
While Chinese zinc smelters moved up a gear to chase profits, limited supply of domestic zinc concentrate amid production cuts and suspension of miners drove smelters to overseas suppliers.
Logistics disruption in north China’s regions such as Xinjiang and Inner Mongolia also accounted for the diverted demand for seaborne concentrates.
Import arbitrage window opened in the second half of November as import losses narrowed from an average above 1,000 yuan/mt in the first half of the month. This triggered the inflow of imported zinc concentrate to China.
Sufficient supplies of zinc concentrate overseas lifted the treatment charges, which improved margins at domestic smelters. The charges are paid by zinc miners to smelters to process ore into refined metal.
SMM assessed that TCs for imported zinc concentrate climbed from $290-300/dmt at end October to $310-330/dmt by mid-November, with TCs for cargoes with inferior quality standing as high as $350/mt.
SMM expects robust domestic demand amid ongoing winter stockpiling to keep China’s imports of zinc concentrate between 330,000-370,000 mt in December.