Smelters Continue to Fulfill Previous Contracts, TCs Remain Low in Multiple Regions [SMM Zinc Concentrates Weekly Review]

SMM, September 11:

On a weekly basis, the average weekly TC for SMM Zn50 domestic ore remained flat WoW at -2,100 yuan/mt Zn, while the SMM Imported Zinc Concentrate Index fell $1.6/dmt WoW to -$126.1/dmt.

Domestic ore market. Approaching mid-month, domestic smelters mostly executed previously signed contracts this week, with limited new purchases, and zinc concentrate TCs in many regions of China remained at low levels. Imported ore market. Traders offered limited cargoes this week, but winter stockpiling demand persisted, and some domestic smelters continued to inquire and stockpile Q4 imported ore, with market TCs staying low. In addition, market sources said a recent New Century mine deal was concluded at around -$150/dmt, while other ordinary ore was still quoted and traded at -$120 to -$130/dmt.

MMG announced on September 7 that its Dugald River operation signed a zinc concentrate sales agreement with Minmetals North-Europe, under which approximately 20,000 dmt will be sold annually in 2027 and 2028, with an annual transaction cap of $50 million for each year. Pricing is based on LME SHG zinc prices and LBMA silver prices minus TCs, with CIF delivery. The Dugald River zinc mine is located in Queensland, Australia, and is one of MMG's core zinc assets, with its concentrates mainly sold to smelters in Asia and Australia. The agreement extends the intra-Minmetals coordinated sales model and secures a stable outlet for part of Dugald River's production over the next two years.

This week, SMM zinc concentrate inventories at major ports in China totaled 294,000 mt in physical content, up 17,000 mt in physical content WoW, with Lianyungang port inventories contributing the main growth.