RE: Zink- Try again - didn't postChinese zinc imports rise as domestic prices outperform LME
(Platts)
Updated: 2009-04-09 11:14
Platts reported that the wide spread between Chinese refined zinc prices and those quoted on the London Metal Exchange has led to an increase in zinc imports over the past three months, as local importers make huge profits.
According to Beijing-based Galaxy Securities, zinc importers were earning an average CNY 500 per tonnes to CNY 600 per tonnes on imports in March, which has gone up to CNY 700 per tonne in April as Chinese domestic prices have outperformed the LME.
Chinese domestic zinc prices were at CNY 12,050 per tonne Tuesday, much higher than LME three-month values at USD 1,350.5 per tonne on the same day.
According to the Chinese customs, 89,703 tonnes of refined zinc was imported during the first two months of this year up by 633%YoY from the same period in 2008. According to Galaxy as well as other industry sources, China's zinc import volume in March is likely to be around 100,000 tonnes higher than the 77,205 tonnes imported in February.
Chinese custom figures for imports in the first quarter of this year were not yet available.
According to Hunan-based zinc producer Zhuzhou Smelter, supplies of locally produced zinc are very tight, following the State Reserve Bureau's recent zinc purchases. A source at Zhuzhou said "Although we can still offer some zinc for domestic sales, stocks in the market are very limited."
A zinc trader with Guangdong based Maike Metal International Group said "Supplies from major zinc brands are limited and we are not sure when supplies will increase."
According to Galaxy, at the moment only privately owned smelters have some zinc stocks as the state owned smelters have sold a lot of their zinc to SRB earlier this year. So far this year, SRB has bought 159,000 tonnes of zinc from Chinese smelters. In January, SRB bought 59,000 tonnes of zinc at CNY 11,800 per tonne while in February it bought 100,000 tonnes at CNY 11,450 per tonne to CNY 11,500 per tonne.
Industry participants, however, expect zinc imports to slow down by mid-May, when the buying season ends. Zinc end-users in China, such as zinc alloy producers, usually buy materials between February and May every year once they are back from the Lunar New Year break end January.