April Refined Zinc Imports Slightly Exceeded Expectations; May Imports Expected to Decline [SMM Analysis]

According to the latest customs data, refined zinc imports in April 2024 were 46,000 mt, down 300.0 mt or 0.68% MoM, up 193.57% YoY. From January to April, cumulative refined zinc imports were 142,700 mt, up 307.36% YoY. Refined zinc exports in April were 650.0 mt, resulting in net imports of 45,400 mt.

The top three supplier countries for refined zinc imports in April were Australia (16,100 mt), Kazakhstan (15,600 mt), and Spain (4,500 mt). Overall, refined zinc imports in April slightly exceeded expectations, mainly due to higher-than-expected imports from Spain, while imports from Australia and Kazakhstan remained high. Although the import window closed in April, previously ordered goods continued to arrive, and zinc ingot imports from South Korea and Japan remained stable.

Entering May, there is strong willingness to go long, and the prices of copper, gold, and silver have surged, leading to a rapid increase in zinc prices. Supported by favourable macro front overseas, LME zinc saw significant gains. On the fundamentals, the short-term shortage of ore is difficult to quickly alleviate, domestic TC fell below historical lows, and although recent actual downstream consumption is weak, consumption expectations are high due to fiscal policies such as real estate, infrastructure, and trillion-yuan government bonds, supporting high zinc prices.

It is expected that in May, with strong LME zinc and weak SHFE zinc, the import window will be difficult to open, and the volume flowing into the domestic market will be limited. However, long-term contract goods can still be maintained, and a small amount of previously ordered goods may be delayed. The import volume is expected to decline to around 25,000-30,000 mt.