Die-casting zinc alloy exports in April hit a new decade-high! How will subsequent exports develop?

SMM, May 23:
In April, China's exports of unwrought zinc alloy surged, with a MoM increase exceeding 450%, hitting a new high in nearly a decade. In contrast, imports saw relatively small changes. Below are the specifics.
According to the latest customs data, China's exports of unwrought zinc alloy exceeded 1,000 mt in April, reaching 1,280.23 mt, up 472.07% MoM and 365.08% YoY. From January to April, cumulative exports of unwrought zinc alloy in China reached 2,188.97 mt, up 101.32% YoY. Meanwhile, China's imports of unwrought zinc alloy were 3,772.12 mt in April, up 6.65% MoM and down 6.43% YoY. From January to April, cumulative imports reached 14,763.56 mt, down 0.76% YoY.

In terms of export destinations, the top three countries and regions for China's unwrought zinc alloy exports in April were Taiwan, China (1,085.55 mt), Vietnam (154.62 mt), and Bangladesh (30.85 mt), accounting for 84.70%, 12.06%, and 2.41% respectively.

In terms of the countries of origin for imports, the top three countries for China's unwrought zinc alloy imports in April remained South Korea (1,369.36 mt), Japan (891.88 mt), and Australia (662.73 mt), accounting for 36.3%, 23.64%, and 17.57% of the total, respectively.

Looking at the specific data, Taiwan, China, single-handedly boosted the overall growth in exports in April. Why did China's unwrought zinc alloy exports to Taiwan, China, surge significantly in April? SMM believes that the main reason for the increase in export volume was due to tariffs.

Firstly, we cannot rule out that the intrinsic demand for die-casting zinc alloy in Taiwan, China, in April drove the increase in China's die-casting zinc alloy exports. However, from a macro perspective in April, after multiple adjustments and increases, the tariff amount imposed by the US on Chinese goods eventually reached 145%, while the tariff imposed on Taiwan, China, was only 34%. This disparity provided some export opportunities for enterprises, potentially driving the export of unwrought zinc alloy products to Taiwan, China. Furthermore, from the perspective of the RMB-TWD exchange rate in April, the continuous depreciation of the exchange rate may have facilitated the inflow of Chinese goods into Taiwan, China.

So, how will China's die-casting zinc alloy exports develop in May?

Firstly, from a macro perspective, the "Joint Statement of the China-US Geneva Economic and Trade Talks" was released on May 12th, which included provisions such as reducing the current tariffs imposed by the US on Chinese products to 30%. This may provide certain opportunities for China's die-casting zinc alloy exports.

Secondly, considering the RMB-US dollar exchange rate in May, the exchange rate slightly appreciated. Objectively speaking, this poses certain obstacles to China's unwrought zinc alloy exports. However, influenced by the recent tariff easing and the improvement in macro sentiment, China's unwrought zinc alloy exports in May are expected to remain at a relatively high level in history. SMM will continue to closely monitor the import and export situation in the future.