Zinc social inventories dropped as robust demand offset influx of imports

SHANGHAI, May 29 (SMM) – Zinc inventory decline in China picked up momentum this week, primarily propelled by a steep fall in Guangdong where saw increased deliveries to north China’s Tianjin and east China’s Ningbo amid wider price spreads between regions.    

SMM data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 10,100 mt in the week ended May 29 to 215,600 mt, much larger than a decline of 1,600 mt in the previous week. The stocks fell 6,500 mt from Monday May 25.

Stocks in Tianjin also fell this week as a pick-up in demand later in the week offset substantial arrivals. Tianjin will see the arrival of some of the deliveries from Guangdong and a large number of shipments from the smelter Zijin next week.

Zinc stocks in Shanghai inched up this week due to concentrated arrivals, even as downstream consumers stepped up purchases in the second half of the week. The influx of imported zinc, such as SMC, on the back of a higher ratio of domestic prices to overseas, also contributed to the great arrivals at social warehouses in Shanghai this week.

Compared to a week earlier, social inventories of refined zinc across the three major trading hubs—Shanghai, Tianjin and Guangdong—fell 8,400 mt, compared to a 1,200 mt decline in the previous week.