Electrolytic Zinc Supply Tightening in Japan

Supply of electrolytic zinc ingot is shortening among Japanese dealers. The supply and demand balance has tightened since July due to steady shipment for galvanized steel sheet makers and copper alloy fabricators. Additionally the ingot consumers seemed to increase spot purchasing in June-July when zinc market price temporarily lowered. At present, the ingot shortage is gradually eased and the supply tightness is expected to be solved in September.

Japanese integrated steel makers are in high production of galvanized steel sheet before the end of September when Japanese government’s tax reduction program for eco friendly cars comes to end. Japanese large zinc smelter source said delivery volume of electrolytic zinc ingot has increased to near 90% of pre-shock level.

Brass strip production is also favorable for electric appliances. The demand is stimulated by Japanese government’s eco point program for energy saving appliances. Zinc ingot delivery is not delayed for large-lot consumers while the supply is shortening for market dealers.

One ingot dealer said the shipment increased especially in June-July. Spot market price of electrolytic zinc fluctuates along Mitsui Mining & Smelting’s ingot selling price, the domestic market indicator. Monthly average of Mitsui’s selling price downed by 60,000 yen to around 200,000 yen per tonne from early May to early June. The ingot consumers, especially zinc die casting makers, seemed to increase spot procurement at cheaper price.