COLUMN-China a net exporter of zinc for the first time since 2014: Andy Home

COLUMN-China a net exporter of zinc for the first time since 2014: Andy Home

The sharp shift in the country's trade dynamics speaks to the disconnect between east and west in the global zinc supply chain.

Stuttering demand in China, particularly from important end-use sectors, such as construction and automotive, has seen Shanghai Futures Exchange zinc stocks nearly triple to 170,850 tonnes since the start of January.

London Metal Exchange (LME) inventory, by contrast, has fallen by 58% this year with almost half of the 84,675 tonnes remaining cancelled in preparation for load-out.

Physical premiums in Europe and the United States are holding at record highs as smelter outages reduce availability.

China's exports are relatively small but April's flip may be a sign that more is on the way to help rebalance an increasingly polarised global market.

ALL CHANGE?

China has been a consistent net importer of refined zinc since 2008, when the government first imposed export taxes on unwrought metal.

Since then, monthly exports had previously exceeded imports only twice - in November and December 2014, when China's bonded stocks financing trade was blown apart by the Qingdao warehousing scandal and large amounts of zinc left the country in search of safer-haven storage.

With that exception, China's refined zinc trade pattern had been one of significant net imports ranging from 400,000