Refined Zinc Imports Increased in August and Are Expected to Remain High in September [SMM Analysis]

According to the latest customs data, refined zinc imports in August 2024 were 26,500 mt, up 8,200 mt or 44.24% MoM, but down 9.01% YoY. From January to August, cumulative refined zinc imports were 267,000 mt, up 30.72% YoY. Refined zinc exports in August were 2,000 mt, resulting in net imports of 24,600 mt.

The top three import sources in August were Kazakhstan (12,500 mt, 46.85%), Australia (8,400 mt, 31.69%), and Iran (2,000 mt, 7.55%). Overall, the MoM increase in imports in August was largely in line with expectations.

The main reason for the increase in August imports was the SHFE/LME price ratio correction at the beginning of the month, which opened the import window and increased the inflow of refined zinc.

Entering September, overseas macroeconomic instability factors have increased. On the fundamentals side, the expectation of resumption in overseas ore production has increased, and LME inventory has continued to accumulate to over 256,000 mt, indicating that overseas consumption remains weak. Domestically, the tightness in the ore supply is difficult to quickly alleviate, and smelters' production remains low, with an expected production of 487,300 mt. Supply remains tight, and although consumption does not show a significant peak season performance, it has improved MoM. With SHFE outperforming LME, the import window has opened, and the continued inflow of previously locked-in priced goods may increase imports to 30,000-40,000 mt.