Singapore 23/09/2016 - China’s import of refined zinc fell 25 percent year-on-year to 25,305 tonnes in August, according to latest data from the Chinese customs.
While imports have risen 50.5 percent from July, analysts said no tightness in the domestic refined metal market could be detected so far.
The import arbitrage window also remains closed, discouraging imports from entering the country, said a Shanghai-based zinc analyst. There has been a lack of import opportunities since late-January.
Imports totalled 334,014 tonnes in January-August, up 25.8 percent from the same period last year.
Chinese zinc ore and concentrate imports fell 68.2 percent year-on-year to 92,718 tonnes in August. The August imports have also subsided, falling 43.7 percent from July’s elevated level.
Imports in July had risen 76.4 percent month-on-month to 164,791 tonnes – this was largely believed to be due to smelters importing mixed lead-zinc oxide concentrates which have higher treatment charges (TCs) than normal zinc concentrates owing to its more complicating separation process.
Since December, the imports have registered negative or flat year-on-year monthly growths – until July this year - 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 zinc smelters are also increasingly turning towards North Korea as a source of concentrates supply. Zinc ore and concentrate imports from North Korea more than doubled year-on-year to 12,623 tonnes in August, taking imports to 79,445 tonnes in the year-to-August. This is up 170.6 percent from the same period last year.
China’s total zinc ore and concentrate imports fell 37.7 percent year-on-year to 1.25 million tonnes in the year through August.
Separately, Chinese zinc concentrate production fell 7.9 percent year-on-year but rose 1.1 percent month-on-month to 409,000 tonnes, according to Shanghai Metals Market, which cited data from the National Bureau of Statistics. Output fell 3.5 year year-on-year to 2.99 million tonnes in the first eight months of the year.
The continued decline in zinc concentrate volumes, which has resulted in a shortage in the raw material, will continue to provide strong support to zinc prices on the Shanghai Futures Exchange, China’s Galaxy Futures said in a report on Thursday.
SHFE zinc prices had hit a five-year high of 18,595 yuan per tonne in late August. The most active November contract was last at 17,870 yuan on Friday, down 40 yuan from its previous day’s close.