In the first three quarters, cumulative zinc ingot imports increased by more than 20% YoY, expected to remain high in Q4 [SMM Analysis]

SMM, November 18: The import volume of refined zinc in 2024 continued to remain high. According to customs data, as of September 2024, the cumulative import volume of refined zinc was 319,800 mt, up 24.26% YoY.

Domestic refined zinc imports remained high due to poor overseas consumption and the continuation of long-term contract imports by major traders. Additionally, the easing of energy issues for overseas smelters in H1 and high zinc prices provided profits for smelters, leading to increased production. However, the delayed transmission of consumption resulted in high overseas inventories. Domestically, the shortage of ore gradually led to significant production cuts at smelters, reducing supply and supporting zinc prices. With LME outperforming SHFE, the SHFE/LME zinc price ratio was restored, intermittently opening the import window and increasing import opportunities, leading to a rise in import volumes.

From the perspective of import data by country, as of September 2024, the top three import sources were Kazakhstan, Australia, and Iran. However, monthly import data showed a significant decline in zinc ingot imports from South Korea, which is partly related to adjustments in local smelter production.

Given the recent strengthening of the SHFE/LME zinc price ratio under the condition of LME outperforming SHFE, intermittent import opportunities for zinc ingots have emerged. Coupled with still high overseas inventories, it is expected that the monthly import volume of zinc ingots will remain high at 40,000-50,000 mt in Q4.