Domestic and imported zinc concentrate TCs remained stable. Domestic smelters still had profits and most of them maintained relatively high operating rates. As such, domestic refined zinc supply remained stable. On the imported zinc front, the import window reopened in May, driving rapid inflows of imported zinc ingots from bonded zone inventories.
Meanwhile, some enterprises locked in the SHFE/LME zinc price ratio. There is expected to be 20,000-30,000 mt of imported zinc in June. On the demand side, operating rates of zinc semis processing industry are expected to fall due to the traditional off-season. This will drive zinc supply into a surplus.
Turkey imposed additional tariffs on steel imports in May. This, coupled with the production resumption at local steel mills in Turkey, will reduce galvanised plate exports in China. But zinc ingot imports by Turkey are expected to increase, which will alleviate the supply surplus overseas. Nonetheless, the overall demand can hardly improve significantly against the high interest rates overseas. Therefore, zinc prices are expected to remain low in June.
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