Chinese Smelters Ramp Up Zinc Exports On Global Supply Squeeze

Chinese zinc producers are ramping up exports after a global supply squeeze opened a rare window for overseas sales.

Output in China, which accounts for over half the world’s total, is tracking for an annual record at a time when global inventories of the metal are in sharp decline. Refined zinc exports likely shot up in October as a result, and are expected to rise further in the last two months of the year, as smelters profit from the spike in international prices while their domestic market stagnates.

Export volumes may rise to as much as 50,000 tons for November and December combined, compared with about 10,000 tons in October, according to estimates from Jinrui Futures Co. For much of the last three years, China has exported just a few hundred tons a month.

The last time the country shipped meaningful volumes was after Russia’s invasion of Ukraine raised energy prices and triggered worldwide smelter closures. In May 2022, volumes topped 35,000 tons, a monthly record.

Spot zinc’s premium to three-month prices spiked to over $300 a ton on the London Metal Exchange last month, signaling an immediate supply shortfall. Although the spread has narrowed to $130 a ton, Chinese exports remain economically viable. The country’s zinc output, meanwhile, hit an all-time high of 665,000 tons last month.

The metal is primarily used to galvanize steel. Chinese capacity has continued to expand despite the impact on construction from the nation’s unrelenting property slump. That’s likely to leave a surplus available for export through the first quarter of 2026 as domestic stockpiles typically build around the Lunar New Year, Zijin Tianfeng Futures Co. said in a note.

On the Wire

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China made its biggest daily purchase of American soybeans in two years, in a move that ends a temporary pause and appears to signal a commitment to a trade truce reached late last month.

Germany is taking a more cautious approach to Beijing’s influence over its energy infrastructure.

This Week’s Diary

(All times Beijing)

Wednesday, Nov. 19:

• CCTD’s weekly online briefing on Chinese coal, 15:00

• CSIA’s weekly polysilicon price assessment

• Asia Tin Week in Hong Kong, day 1

• China Electricity Council’s EP Shanghai conference, day 2

• Tongwei’s annual solar conference in Chengdu, day 4

Thursday, Nov. 20:

• China sets monthly Loan Prime Rates, 9:00

• China’s 3rd batch of Oct. trade data, including country breakdowns for energy and commodities

• CSIA’s weekly solar wafer price assessment

• Green shipping fuel conference in Shanghai

• China Global Think Tank Innovation Forum in Beijing

• Asia Tin Week in Hong Kong, day 2

• China Electricity Council’s EP Shanghai conference, day 3

• Mysteel’s Ferrous Value Chain Summit in Xiamen, day 3

• Tongwei’s annual solar conference in Chengdu, day 5

Friday, Nov. 21:

• China’s weekly iron ore port stockpiles

• SHFE’s weekly commodities inventory, ~15:30

• Asia Tin Week in Hong Kong, day 3