Zinc social inventories extended gains by 18,900 mt on week

SHANGHAI, Feb 28 (SMM) – Zinc inventories in China continued to trend higher this week, albeit by a smaller margin as some smelters trimmed output on high sulphuric acid inventories and as some downstream consumers stepped up purchases on dips.

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei increased 18,900 mt in the week ended February 28 to 313,400 mt, compared to a gain of 33,700 mt in the previous week. Compared to Monday February 24, the stocks rose 7,000 mt.

Guangdong registered the biggest gain among the seven regions this week, as cargoes moved from smelters to social warehouses and as smelters there did not curtail production.

Arrivals at social warehouses in Shanghai and Tianjin reduced slightly this week, as concerns about sulphuric acid storage capacity shortages forced some smelters there to cut production. Zinc social inventories in the two regions extended their gains, however, as demand recovered slowly.

Notably, stocks in Jiangsu and Zhejiang turned lower this week, as arrivals were limited and downstream consumers replenished their stocks after zinc prices tumbled.

This week, social inventories of refined zinc across Shanghai, Tianjin and Guangdong increased 20,500 mt, after expanding 28,300 mt last week.