Die-casting zinc alloy exports fluctuated continuously. How will be the exports in September? [SMM Analysis]

In Q3, die-casting zinc alloy exports fluctuated continuously, but cumulative YoY increases were observed, with a 54.06% YoY increase in July and a 57.68% YoY increase in August. As of August, this year's die-casting zinc alloy exports reached 3,499 mt, an increase of 1,280 mt YoY. In China, die-casting zinc alloy is generally exported in the form of die-casting zinc alloy parts. When overseas demand is high and exchange rates and tax rates are within acceptable ranges for die-casting zinc alloy enterprises, exports are higher; otherwise, they are lower. Currently, due to international regional disputes and tax rate issues, exports to the Middle East and Europe and America have decreased, with most exports going to Southeast Asia. Overall, die-casting zinc alloy exports met expectations. So, how will die-casting zinc alloy exports perform in September?

Firstly, by export destination, in August 2024, China Taiwan imported 256.1 mt of die-casting zinc alloy, accounting for 58.12% of the total in August; Vietnam imported 92.36 mt, accounting for 20.96%; Bangladesh imported 38.02 mt, accounting for 8.63%; Uzbekistan imported 0.66 mt, accounting for 0.15%; other countries imported a total of 53.49 mt, accounting for 12.14%. Russia, which ranked first, imported 500.55 mt of die-casting zinc alloy in July, but had no imports in August due to difficulties in receiving payments, leading many enterprises to reduce exports to Russia. Southeast Asia, with lower labor and material costs and higher market demand, has become the main export destination for China. Overall, traditional major export destinations still hold a significant share.

SMM believes that the MoM increase in die-casting zinc alloy exports in August was mainly due to the narrowing SHFE/LME price ratio, which increased export opportunities for enterprises. Looking back at Q2, we can see that in April, the SHFE/LME price ratio was still at a high level, resulting in lower exports in April. The SHFE/LME price ratio fell to a yearly low from late April to May, leading to increased exports in May. In June, the SHFE/LME price ratio rose slightly, causing exports to decrease again. In Q3, the SHFE/LME price ratio rose from a relatively low level in July and August to a relatively high level, resulting in an initial increase followed by a decrease in die-casting zinc alloy exports.

Looking ahead, based on the current downward trend of the SHFE/LME price ratio and the seasonal characteristics of September, die-casting zinc alloy exports are expected to increase slightly in September.