Analysis of Zinc Concentrate Status [SMM Analysis]

Regarding domestic mines, according to an SMM survey, as temperatures gradually rise, some regions in China that had previously reduced or halted zinc concentrate production are gradually resuming operations. From January to April, the domestic zinc concentrate operating rate and monthly output increased month by month. For May and June, although some lead-zinc mines in north China experienced a decline in ore grade, leading to a decrease in concentrate output, the overall capacity release continues to increase with the progress of resumption and expansion in some domestic mines, potentially boosting the operating rate further.

Regarding overseas mines, Adriatic Metals recently announced that it has sold the first batch of concentrate from the Vares mine in central Bosnia. The Vares mine officially launched on March 5 this year and is currently ramping up production, aiming to reach its rated capacity of 800,000 mt in the fourth quarter of this year. Additionally, Swedish mining company Boliden announced on May 3 that it would resume production at its Tara zinc mine in Ireland after reaching a cost-reduction agreement with the union. The progress of overseas lead-zinc mine commissioning and resumption continues to advance.

Regarding imported ore, the global shortage of ore remains unchanged. As overseas smelters gradually resume operations, zinc production at smelters from Nordenham in Germany to Nyrstar's Budel smelter in the Netherlands resumed in the week of May 13. The demand for zinc ore from overseas smelters is also strong. According to SMM statistics, the cumulative YoY decline in imported zinc concentrate from January to April was 23.6%. Recently, the import window for ore has remained closed, and the import volume of zinc concentrate in May is unlikely to see significant improvement.

Regarding port stocks, the main domestic ports for imported zinc ore include Fangchenggang, Lianyungang, Huangpu, Qinzhou, and Jinzhou, as well as some land transportation ports. Among these, Fangchenggang and Lianyungang are the primary import ports. SMM continues to track zinc concentrate stocks at Fangchenggang, Lianyungang, and Jinzhou ports. The inventory at Lianyungang has hit a historical low, indicating a tight supply of ore.

In summary, the story of domestic ore shortage continues, and June is the peak period for TC negotiations. Domestic zinc ore port stocks remain low. SMM data showed that domestic and imported zinc concentrate TC in June were lowered further.