BEIJING: China imported 77,198 tonnes of refined zinc in September, an increase of 368% on a year-over-year basis and an increase of 17.7% from last month. The rise is being attributed in published reports to the reopened arbitrage window during that month and supply tightness in the domestic market.
The jump in Chinese imports is more good news for zinc producers, which have seen the price of the metal soar 23% this year, extending a 60% rise in 2016, as cuts in global mine supply and China’s crackdown on pollution and mine safety created a shortage. Zinc shortages are expected to persist in the next few quarters, keeping prices at the US$3,000 to US$3,500 per ton level. The move upward has prompted some companies to consider hedging in a move to lock in the recent price gain. Canadian ompanies with exposure to zinc include Teck Resources Ltd. (TSX: TECK.B, NYSE: TECK, Forum). On Wednesday, the shares eased 0.64% to $29.45. Hindustan Zinc Ltd., a unit of billionaire Anil Agarwal’s Vendata Ltd., has hedged about a quarter of its annual metals production, according to a Bloomberg report.
