Refined Zinc Imports Up 98.28% MoM in September, Will October Imports Continue? [SMM Analysis]

SMM, October 22: According to the latest customs data, refined zinc imports in September 2024 were 52,800 mt, up 26,200 mt or 98.28% MoM, down 0.61% YoY. From January to September, cumulative refined zinc imports were 319,800 mt, up 24.62% YoY. Refined zinc exports in September were 900 mt, resulting in net imports of 51,800 mt. The top three sources of refined zinc imports in September were Australia (17,200 mt, 32.58%), Kazakhstan (13,600 mt, 25.93%), and India (6,400 mt, 12.3%). Overall, September imports significantly exceeded previous expectations, with notable increases from Australia, Kazakhstan, India, and Spain. The main reason for the increase in September imports was the SHFE outperforms LME at the beginning of the month, with the SHFE/LME price ratio recovering to around 8.5, opening the import window and providing import traders with pricing opportunities. Additionally, imports under long-term contract continued to flow in, increasing the overall inflow of refined zinc.

Entering October, macro market sentiment has been volatile but remains generally positive. On the fundamentals side, there have been continuous overseas news updates. At the mine end, Australia's New Century mine experienced a fire and halted production, expected to resume on November 16, 2024, with an impact on production of about 9,680 mt (metal content). On the smelter side, Trafigura's Balen and Auby smelters may face shutdowns due to power issues by the end of Q4 or early Q1 next year, with expectations for production cuts supporting zinc prices. Domestic smelters have completed previous maintenance and production cuts. With the increase in imported ore port arrivals, smelters' raw material inventory has risen to over 15 days MoM. There are increased expectations for production in Q4, but with no significant improvement in consumption, domestic zinc prices are struggling to rise. Overall, with LME outperforming SHFE, the import window has closed. Although the import window is expected to remain closed in October, previously priced goods will continue to flow in, and import volumes may decrease to around 40,000 mt.