Zinc concentrate TCs continued to rise in August, with imports also increasing [SMM Weekly Review of Zinc Concentrates]

SMM reported on July 25:

In August, zinc concentrate TCs continued to rise. The average monthly domestic zinc concentrate TC of SMM increased by 100 yuan/mt (metal content) MoM to 3,950 yuan/mt (metal content). This week, domestic zinc concentrate TCs remained stable, while imported zinc concentrate TCs increased MoM. Specifically, the average weekly domestic Zn50 TC of SMM remained unchanged MoM at 3,800 yuan/mt (metal content), and the SMM Imported Zinc Concentrate Index increased by $2.5/dmt MoM to $76.25/dmt.

In the spot market, as the month entered its latter half, domestic smelters began preliminary negotiations on zinc concentrate TCs for the next month. With abundant raw materials, smelters continued to refuse to budge on prices, and it is expected that zinc concentrate TCs will continue to rise in August. Regarding imported zinc ore, the SHFE/LME price ratio remained unimproved this week. Although traders' offers increased recently, smelters still primarily purchased domestic ore due to its price advantage, and spot transactions of imported zinc ore were sluggish during the week. Additionally, there were recent transactions of zinc ore between traders and smelters at around $80/dmt. A tender result for a zinc mine in North China was 5,300 yuan/mt (including an 80:20 profit-sharing arrangement). SMM will continue to monitor subsequent changes in TCs.

Glencore announced on Tuesday its decision to sell its Lady Loretta zinc mine and related land to Austral Resources. This acquisition will enable Austral to extract more copper ore from its existing Lady Annie mine, as the boundary of the Lady Annie mine is adjacent to that of the Lady Loretta mine. Lady Loretta is one of the zinc-lead-polymetallic mines in Glencore's Mount Isa mine area in Queensland, Australia. In a report disclosed by Glencore in early 2025, it was stated that the zinc mine operations at Lady Loretta would officially shut down by the end of 2025, and this transaction is also expected to be completed around the same time. The Mount Isa mine area mainly includes two zinc-lead mines: George Fisher and Lady Loretta. According to public data, the former has an average annual mining volume of approximately 3 million mt, while the latter has an average annual mining volume of approximately 1.6 million mt.

According to the Q2 report disclosed by Canadian miner Teck Resources, the concentrate shipping season commenced on July 11. In this quarter, Red Dog zinc concentrate sales were 35,100 mt (metal content), a 35% YoY decrease mainly due to the timing of sales (customer requirements, logistics arrangements, etc.), but still higher than the previously disclosed guidance range of 25,000 to 35,000 mt (metal content). Teck expects that finished product inventories accumulated due to seasonal factors in H1 will be released in Q3, and has provided a guidance range of 200,000 to 250,000 mt (metal content) for Red Dog zinc concentrate sales in Q3. The guidance ranges for lead and zinc concentrate production at this mine in 2025 remain unchanged, at 85,000 to 105,000 mt (metal content) and 430,000 to 470,000 mt (metal content), respectively.

This week, the total inventory of SMM zinc concentrates at China's main ports was 354,000 mt, a decrease of 86,000 mt WoW, indicating a significant decline in port zinc ore inventories.