China's Ore Shortage Unchanged, July Zinc Concentrate TCs Continue to Decline [SMM Zinc Concentrate Weekly Review]

SMM, July 3:

On a weekly basis, the SMM Zn50 domestic weekly TC average fell WoW by 400 yuan/mt Zn to -600 yuan/mt Zn, and the SMM Imported Zinc Concentrate Index (weekly) fell WoW by $5.33/dmt to -$82.83/dmt.

Domestic ore market. At the beginning of the month, this week marked the peak period for TC negotiations between domestic smelters and mines. The SHFE/LME price ratio stayed persistently low, and smelters continued to purchase domestic zinc concentrates on a limited basis. However, sulphuric acid prices in several regions of China kept rising, continuously supplementing smelters' profits. The tight supply of domestic zinc concentrates persisted in July, and overall domestic zinc concentrate TCs extended their decline. According to market reports, a mine in southwestern China recently held a tender for zinc concentrates at an EXW price of around -800 yuan/mt Zn for July delivery, a MoM decrease of about 700 yuan/mt Zn.

Imported ore market. This week saw numerous offers in the imported ore market. Against a backdrop of tight supply-demand for domestic zinc concentrates, traders continued to lower their offers for imported zinc concentrate TCs, and some smelters purchased as needed. Spot imported zinc concentrate transactions increased this week. It is understood that market sources reported deals between traders and smelters for imported zinc concentrates at around -$80 to -$90/dmt for Q3 shipment, with some high-impurity zinc concentrate offers remaining in the negative triple-digit range. Overall, imported zinc concentrate TCs sustained their downtrend.

Appian Capital Advisory, a private equity firm that holds a 90% stake in the Rosh Pinah zinc-lead mine in Namibia, announced that the core equipment of the mine's expansion project (RP2.0)—a new semi-autogenous grinding (SAG) mill—has been successfully commissioned and put into operation. This equipment is the final major component of the beneficiation system, marking the completion phase of the RP2.0 expansion project. According to the company, the new SAG mill will replace the existing ball mill, and the mine's ore processing capacity is expected to increase from the current approximately 700,000 mt/year to around 1.4 million mt/year after reaching full production, doubling its capacity. The overall construction progress of the RP2.0 project has now exceeded 95%, and it is expected to extend the mine life and improve resource utilization rates, supporting future zinc concentrate production growth.

This week, SMM zinc concentrate inventories at major Chinese ports totaled 314,000 mt in physical content, up 25,000 mt WoW, with Fangchenggang port inventories accounting for the majority of the increase.