Singapore 24/05/2016 - China’s import of refined zinc fell 23.6 percent year-on-year and 49.2 percent month-on-month to 39,106 tonnes in April, according to latest data from the Chinese customs.
This took imports to 220,091 tonnes in January-April, up 65.4 percent from the same period last year.
April marks the first year-on-year decline since September last year. Zinc imports into China had risen on a year-on-year basis since September last year due to arbitrage opportunities and tighter supply in the domestic market as Chinese smelters limited sales amid falling zinc prices.
The decrease in April was within expectations as the arbitrage window between Shanghai and London markets had mostly been closed since late-January, making it unprofitable to import since, said market watchers.
The unattractive arb had resulted in thin trading and rising bonded warehouse stocks in Shanghai. Bonded zinc stocks had climbed by around 10,000 tonnes month-on-month to 105,000-120,000 tonnes at end-April, according to FastMarkets’ survey.
Zinc ore and concentrate imports also fell 36.8 percent year-on-year to 147,138 tonnes in April, taking year-to-date imports to 796,400 tonnes. This was down 16.7 percent from the same period last year.
Since December, the imports have registered negative or flat year-on-year monthly growths as Chinese smelters choose not to take delivery of overseas concentrate due to low overseas treatment charges (TCs). Chinese smelters have instead supplement their raw material supply through the domestic market, which is much cheaper although material is of poorer quality.
Chinese imports of zinc metal, and ore and concentrate should continue to decline in the near-term due to an unfavourable arb, and low overseas TCs, said a Shanghai-based zinc analyst.
“Though domestic zinc concentrate has turned slightly tight, smelters continue to buy domestic concentrates as the overseas TCs are still ‘unsuitable’,” she said.
Meanwhile, Chinese refined lead imports fell 13.6 percent year-on-year to 4,850 tonnes in April. This took year-to-April imports to 11,244 tonnes, up 4.4 percent year-on-year.