Iran war fallout disrupts China’s zinc supply

JH Kim

Summary

Chinese zinc smelters are facing raw material supply shortages due to the fallout from the war in Iran.
Iran and Russia account for about 15% of China’s zinc feedstock supply, and closures and supply delays are increasing supply tightness.
The industry says the conflict could trigger knock-on upward price pressures in other commodity markets as well, including zinc, aluminum, nickel, copper and fertilizers.

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The fallout from the war in Iran is leaving Chinese zinc smelters facing a shortage of raw material supplies.

According to Walter Bloomberg on the 13th (local time), exports of zinc feedstock bound for China from Iran have been halted, disrupting smelters’ ability to secure raw materials. The squeeze is intensifying as delays in supply from Russia’s Ozernoye mine add to the disruption.

Iran and Russia are key suppliers, accounting for about 15% of China’s zinc feedstock supply. Supplies are contracting even faster as the Port of Bandar Abbas near the Strait of Hormuz has been closed and cargoes originating from Oman have also been canceled.

As a result, Chinese companies are said to be seeking alternative sources to secure volumes for May–June.

The industry says the conflict could also trigger knock-on upward price pressures across other commodity markets, including aluminum, nickel, copper and fertilizers.