Zinc – general trade imports depressed, with a rising sentiment of sitting on the sidelines

Date 4/16/2018 5:42:58 PM Source: SHMET

Zinc Premiums in Shanghai bonded warehouse quoted at $125-$135/mt and CIF shanghai stood at $135-$145/mt. Today LME C-3m valued at $11C, while the SHFE Spot/LME 3M arb also retreated to around 7.71, the spot import loss to RMB147/mt and expanding loss slightly in forward market, around RMB828/mt lost. Custom duty exempt brands, Australian and Korean, still generate quite a loss of RMB184/mt in spot import market, but it may lose RMB577/mt in forward import.

Traders said that there are a lot of inquiries in the market, with limited actual purchase. General trade imports are not much, with some traders buying cargoes of low price, but the cargo holders are reluctant to sell by reducing their cost and the whole market is on the sidelines. Reports from domestic market said that downstream zinc demand in the second quarter is recovered, with social stocks continuing to fall. Currently, imported zinc shows small profit, which may increase domestic supply of zinc ingots. In addition, high zinc price leads to the reproduction of the idle capacity of zinc mines. The market expectation that the supply of zinc ore will be loosened is growing stronger. 

Edited by SHMET