China imported 110Kt of lead concentrate in February, which
represented a modest 34% y/y contraction as well as a 19% higher m/m.
Refined trade data saw China remain a modest net exporter of 427t. The
data comes from Barclays' stable.
Given the SHFE-LME arbitrage window was firmly shut – as has been the case since August last year – and SHFE stock levels rose by close to 20Kt during the month, there was little economic incentive to bring refined metal into the country.
Downstream trends were more positive during the month with lead battery production rising 19% y/y and e-bike output up 19%. If the trade data is suggestive of constrained activity at a refined level, then the Chinese lead market is certainly orientated in a direction towards re-tightening.
“We would urge caution in reading too much into this period of weakness due to the much later New Year holiday, which make February comparisons particularly difficult this year. Nevertheless, the broad trends fit our view that slower growth, rising domestic production and relatively high inventories of many commodities will keep China’s commodity import demand at relatively modest levels in 2013.” Barclays said in the report.
In-line with expectation, China’s net refined tin imports fell to just 1.2Kt in February, a near 70% y/y decline. This represents the lowest level of imports since July 2011 which we anticipated given that in previous periods of such extreme weakness in Chinese prices versus LME, refined imports have dropped to the 1Kt month level.
Indeed, the ITRI believe there is close to 18Kt of refined tin stock in China, and that short of lower imports of cutbacks in refined production, this hefty inventory overhang will not be eroded.
Tin ore and concentrate imports were also weaker, falling by 5% y/y to 3.2Kt and significantly lower than the sharp upside surprise figure of 17.6Kt recorded in January.
Given the SHFE-LME arbitrage window was firmly shut – as has been the case since August last year – and SHFE stock levels rose by close to 20Kt during the month, there was little economic incentive to bring refined metal into the country.
Downstream trends were more positive during the month with lead battery production rising 19% y/y and e-bike output up 19%. If the trade data is suggestive of constrained activity at a refined level, then the Chinese lead market is certainly orientated in a direction towards re-tightening.
“We would urge caution in reading too much into this period of weakness due to the much later New Year holiday, which make February comparisons particularly difficult this year. Nevertheless, the broad trends fit our view that slower growth, rising domestic production and relatively high inventories of many commodities will keep China’s commodity import demand at relatively modest levels in 2013.” Barclays said in the report.
In-line with expectation, China’s net refined tin imports fell to just 1.2Kt in February, a near 70% y/y decline. This represents the lowest level of imports since July 2011 which we anticipated given that in previous periods of such extreme weakness in Chinese prices versus LME, refined imports have dropped to the 1Kt month level.
Indeed, the ITRI believe there is close to 18Kt of refined tin stock in China, and that short of lower imports of cutbacks in refined production, this hefty inventory overhang will not be eroded.
Tin ore and concentrate imports were also weaker, falling by 5% y/y to 3.2Kt and significantly lower than the sharp upside surprise figure of 17.6Kt recorded in January.
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