2010 April Zn Imports and Exports Data Analysis

SHANGHAI, May 31 (SMM) --
Zinc Concentrate:
According to China Customs, China's imports of zinc concentrate were 212 kt during April, up 10.4% MoM, with YTD imports of 1.068 million mt, up 2.74% YoY.  Based on current domestic zinc output and existing zinc smelting capacity, recent sluggish imports of zinc concentrate were not due to declines in demand for raw mateirals from domestic zinc smelters, but due to higher LME zinc prices from February to March, which made importing zinc concentrate unfavorable.  However, LME zinc prices continue to set new lows, opening the door to profitable imports in the near term.  In this context, SMM predicts China's improts of zinc concentrate will increase during May and June. 

Refined Zinc:
According to China Customs, China's imports of refined zinc were 31 kt during April, up 72% MoM, with YTD imports of 92 kt, down 70.8% YoY.  There were three reasons behind growing zinc imports.  First, arrivals of imported zinc were relatively limited during March due to the Chinese New Year holiday in February, so growth in zinc imports was high in April.  Second, the SHFE/LME zinc price ratio increased significantly from mid-March onward.  Third, a number of domestic downstream producers which have used imported zinc as raw material since 2009 have now begun to resume normal production, helping increase demand for imported zinc.

China's exports of refined zinc were 4,327 mt during April, down 19.4% MoM, and with YTD exports of 25 kt, up 505% YoY.  Domestic zinc YoY export rates have surged since early 2010, a sign of a significantly improved zinc export market. However, China's exports of refined zinc to European countries may be affected by domestic inflation and depreciation of the Euro.

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