Zinc concentrate imports fell slightly in March [SMM analysis]

According to the latest customs data, 244,300 tons of zinc concentrate (physical content) were imported in March 2024, a decrease of 2.73% from February, and a year-on-year decrease of 23.86%. The cumulative zinc concentrate import volume from January to March was 891,300 tons (physical content), a year-on-year decrease of 27.12%.

In March 2024, the top three supplier countries were: Iran with 36,600 tons in physical content in March, accounting for 14.99%; Russia with 31,500 tons in physical content in March, accounting for 12.89%; South Africa with 26,800 tons in physical content in March, accounting for 10.98%. In March, imports from Peru, Australia, and Kazakhstan saw significant reductions, while those from Russia, Eritrea, Morocco and other countries saw an increase to varying degrees.

SMM attributes the low zinc concentrate imports to three reasons:

1. In March, there were many reports of production disturbances at overseas mines. Some lead and zinc mines in Peru, Australia and other countries reduced or stopped production, resulting in a reduction in output, which in turn affected China’s imports;

2. In March, a large number of domestic zinc smelters reduced production due to maintenance. SMM data showed that output at domestic zinc smelters was 525,500 tons in March, a year-on-year decrease of 5.61%. The low output affected the demand for imported ore;

3. The TCs for imported zinc concentrate were lower. For smelters, domestic ore had higher profits, thus domestic smelters preferred to purchase domestic ore.

Therefore, although the ore import window was briefly opened in March, poor demand affected the domestic ore import volume. The SHFE/LME price ratio continued to decline in April, and the ore import window was closed again. In addition, SMM expected domestic refined zinc production to decrease slightly by 21,200 tons month-on-month in April. As such, zinc concentrate import volume in April may not increase much.