SHANGHAI, Jun 14 (SMM) – It should be pointed out that TCs for domestic and overseas zinc concentrates both have been unchanged so far. In particular, most domestic zinc smelters have maintained high operating rates for profits, which suggests that domestic refined zinc supply should remain stable in June.
When it comes to imports, the zinc ingots in the bonded zone flowed rapidly into the Chinese market in May when import window opened. As some enterprises seized the moment to lock the SHFE/LME zinc price ratio to import, it is expected that there will be another inflow of 20,000-30,000 mt of imported zinc ingots in June.
In June, the domestic demand for semis has been low due to the traditional off-season, so SMM estimates that the average operating rate of zinc downstream enterprises will drop on a monthly basis and that zinc ingots will be oversupplied.
As for overseas demand, it will hardly improve against high interest rate overseas when the steel mills in Turkey are resuming operation following the steel tariffs placed by the country last month. As such, China’s exports of galvanised sheet in June are likely to shrink, while its imports of zinc ingots from Turkey may rise, somehow preventing the overseas zinc market from a supply surplus.
In the final analysis, zinc prices in June will consolidate at low levels.
