Reasons behind Opposite MoM and YoY Growths of Zinc Alloy Exports in August

SHANGHAI, Sep 21 (SMM) - According to the latest customs data, China exported 210 mt of unwrought zinc alloy in August, up 15.04% on the month and down 17.36% on the year. The exports totalled 1,147 mt in January-August 2022, down 72.28% YoY.

Chinese zinc alloy was mainly exported to Vietnam (144.3mt), Bangladesh (24mt) and Paraguay (16mt) in August. The MoM growth in the exports mainly resulted from the increase in the exports to Vietnam. Compared with the monthly export volume last year, the export volume of zinc alloy this August remained sluggish, but it was higher than the monthly export volume in 2018, 2019 and 2020.

According to SMM analysis, the reasons behind opposite MoM and YoY changes of unwrought zinc alloy exports are listed as follows.

The explanation for MoM increase is the devaluation of the Chinese yuan. The global economy has to pay the price for the inflation in the United States since the world economy is governed by a dollar-centric monetary system. As the U.S. Fed raised interest rates sharply, other countries in eurozone followed suit. At the same time, the domestic LPR and deposit interest rate were lowered many times due to slow economic development, leading to the depreciation of the Chinese yuan. As a result, the trade surplus increased and enterprises gained more profits from exporting, which drove the export of die-casting zinc alloys to increase month-on-month.

The reason behind YoY decline is the extremely poor overseas order for the Christmas holiday restocking. In the same period last year, the overseas orders for zinc alloys for Christmas preparation were relatively strong, and most domestic zinc alloys were exported in July and August. However, the global economic is sluggish this year in the post-pandemic era. The overseas energy conflict weighed on the manufacturers in most countries of the eurozone, who were prevented from purchasing under cost pressure. Therefore, the exports in August and during January-August both declined from the previous year.

Basically, the overseas orders were muted in September of previous years, while this year, the domestic peak season in September-October ended so soon that the weekly operating rates of manufacturers remained low. Therefore, it is expected that the export of die-casting zinc alloys in September might fail to increase on a monthly basis.