Metal News

Will China be a net zinc importer in 2002?

For several years China has been blamed for at least some of the ills afflicting the international zinc market and prices. While it is undoubtedly true that China is a very significant force in the global zinc market, its place as a major net exporter of zinc units to the rest of the world may be about to change.

Since 1993 China has been an important exporter of refined zinc ingot. Until last year it was also a net exporter of zinc concentrates. China also trades zinc alloys and semi-products internationally, but it has been a net importer of these products rather than an exporter. Totaling trade in refined zinc, zinc in concentrates, alloys and semi-products, China exported a net 460 kt of zinc units in 2000. However, as it began to import very large tonnages of zinc concentrates, its net exports of all zinc units shrunk to less than 40 kt in 2001. Now, on the basis of the trade data through to July this year, it is apparent that China will swing from being net exporter to net importer of zinc units in 2002. As such, while some attention will continue to be paid to how much refined zinc China is exporting, perhaps greater recognition will be made of its role as an importer and consumer of zinc as well.

Trade data for China in recent months confirm the trend evident since early in the year of a definite slowing in the pace of refined exports. This is hardly surprising. China’s consumption of zinc continues to grow while output of refined zinc will fall this year for the first time since 1983, and this loss will be quite significant. The key factor in this has been an acute shortfall in zinc concentrate supplies as a result of a fall in domestic mine production. Though the focus has been on the tin mining disaster in Guangxi in 2001, which forced the authorities to implement extensive mine closures, these have had a very significant impact on production of zinc in concentrate. Total Chinese zinc mine production is likely to be at least 10% down this year, with the year-to-date loss in Guangxi alone reported to be 70% through to July. In 2000, Guangxi was China’s largest zinc concentrate producing province.

China’s pivotal role in the global lead and zinc markets is a topic that regularly receives attention whenever the prospects for these two metals are discussed. In 2001 China overtook Canada as the world’s largest exporter of refined zinc (although it will lose that position again this year) and for several years it has been the largest exporter of refined lead.

China attracts much attention from commentators on the global lead and zinc industries, not just because it is the world’s largest primary producer of both metals; the myriad of small operations and the complexity of the industry makes understanding the significance of new developments more difficult, and the process of predicting the future course of the industry fraught with problems. CHR Metals has just published the first reports in its new biannual subscription services, China Zinc and China Lead. CHR Metals monitors, on a daily basis, the significant volume of information now available from China, maintaining a vigorous system of data capture, collation, analysis and follow-up in order to place all the news and information in its proper context. A regular program of targeted visits to China, participation in Chinese lead and zinc industry events and further information from its own contacts inside the country enables CHR Metals to offer a regular subscription service that provides timely and accurate analysis of China’s lead and zinc industries.

For further information contact Huw Roberts, CHR Metals Ltd. at huw.roberts@chrmetals.com