Smelter winter stockpiling demand persists, TCs continue to decline [SMM zinc concentrate weekly review]

SMM, September 30:

On a weekly basis, the average weekly domestic Zn50 TC in China fell 250 yuan/mt Zn WoW to -2,350 yuan/mt Zn, while the SMM Imported Zinc Concentrate Index dropped $5.32/dmt WoW to -$135.72/dmt.

Domestic ore market. This week, domestic smelters continued negotiating October zinc concentrate TCs. TCs in some regions have already been settled, with overall ore TCs for October remaining at low levels. According to market sources, a mine in southwestern China last week tendered October zinc concentrates at around -2,300 yuan/mt Zn on an ex-warehouse basis.

Imported ore market. With the National Day holiday approaching, fewer traders offered cargoes this week, but winter stockpiling demand persisted. Smelters made purchases as needed, and transactions in the imported ore market continued. According to market sources, Antamina zinc concentrates were recently offered at around -$150 to -$160/dmt, while Peruvian containerized zinc-rich concentrates traded at around -$150/dmt. Imported ore TCs overall extended their downward trend.

Nyrstar announced the initiation of a strategic review of its Budel zinc smelter in the Netherlands, mainly due to high energy costs in Europe, intense competition for zinc concentrates, and persistently low TCs. The company said Budel has been operating at a loss, and the Dutch government did not include power grid fee relief for energy-intensive industries in its 2027 budget, further intensifying operational pressure. The strategic review is expected to be completed before the end of 2026, during which Budel will maintain normal production. The smelter has a refined zinc capacity of 315,000 mt per year. It was idled in January 2024 due to high energy costs and restarted in May of the same year. The outcome of this review could become an important variable for refined zinc supply in Europe.

This week, SMM zinc concentrate inventories at main ports in China totaled 257,000 mt in physical content, down 40,000 mt in physical content WoW, with Fangchenggang port inventories contributing the largest decline.