Rising Treasury Yields Hit The Complex

Finally, SMM reported that China’s plan to restrict carbon emissions would result in reduced output levels from zinc smelters in northern China. It is estimated that about 2% of the nation’s monthly zinc production would be hit as result next quarter. As of now, the output cuts are not huge. However, if restrictions were prolonged, it could tighten supply in north China. Currently, Inner Mongolia’s smelters are expected to reduce zinc output by 32kt (-20%) in 2Q21. Zinc output in Inner Mongolia stood at around 160kt during the second quarter last year.

Agriculture

The latest trade data from China Customs confirmed very strong imports of grain over the first two months of the year.  A recovery in the herd stock, along with Beijing’s commitment to the phase-1 trade deal with the US, has been supportive for agricultural imports into China. Corn imports increased 414% YoY to 4.8mt over the first two months of the year, a record amount at this stage of year. Similarly, wheat imports increased by 265% YoY to total 2.48mt over January and February.

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Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

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