[SMM analysis] Zinc concentrate imports fell sharply month-on-month in June compared with the previous month. Peru's zinc ore imports dropped sharply.

SMM7 March 27:

According to the latest customs data, imports of zinc concentrate totaled 213100 tons (physical tons) in June 2020, a decrease of 143600 tons (physical tons) compared with May, and an increase of 24600 tons (physical tons) over 2019.

Comparative Chart of Zinc concentrate Import from 2019 to 2020

Source: SMM

By country, Australia imported 91600 physical tons, accounting for 42.97% of the total zinc concentrate imports in June, ranking first; Eritrea imported 31900 physical tons, accounting for 14.98% of the total zinc concentrate imports in June, ranking second; Malaysia imported 33800 physical tons, accounting for 8.70% of the total zinc concentrate imports in June, ranking third.

According to SMM, the reasons for the sharp month-on-month decline in zinc concentrates in June are as follows:

First, there was a sharp decrease in zinc concentrate month-on-month in June, on the one hand, due to a sharp decrease in imports of zinc concentrate from Australia, a decrease of 57400 physical tons compared with May. This is mainly due to a significant reduction in global mineral production after this year's epidemic, and the tightening of raw material stocks in smelters in various countries has also increased the demand for imported zinc concentrate from Australia, resulting in a decrease in Australia's exports to China. On the other hand, imports of zinc concentrates from Peru decreased by 65700 physical tons to only 1200 physical tons, mainly because mines in the Peruvian region began to stop production in mid-March due to the impact of the epidemic, affecting subsequent zinc mine shipments.

Second, due to the import of a large number of zinc concentrates to Hong Kong from April to May, domestic port mine inventories climbed to a high in recent years. After entering June, due to the decline in domestic processing fees to 5000 yuan / metal ton, refineries worried about a further decline in processing fees, carried out a large number of replenishment, port mine inventory quickly digested and transferred to the smelter, smelter raw material inventory gradually replenished to the normal level, also led to a decline in its demand for imported mines.

Third, due to the downward revision of the Shanghai-London ratio, the import of zinc concentrate has always been at a loss in June, and the import window is closed.

In July, the Antamina mine in Peru announced on May 27th that it was operating at 80% of its full capacity. After the production and shipment resumed, its zinc concentrate will resume to Hong Kong at the end of July, and other overseas mines will also gradually resume production. It is expected that imported zinc concentrate will pick up slightly in July compared with June. Taken together, SMM expects imports of zinc concentrate to pick up to about 300000 physical tons in July.

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