More Negative TCs Deals for Domestic Zinc Concentrates; Overall Downtrend Continues [SMM Zinc Concentrates Weekly Review]

SMM June 5 News:

Looking at weekly data, the SMM Zn50 China-made weekly average TC decreased WoW by 100 yuan/mt Zn to 50 yuan/mt Zn, and the SMM Imported Zinc Concentrate Index fell WoW by $7.3/dmt to -$70.75/dmt.

Domestic Ore Market. According to SMM data, China's refined zinc production saw a limited decline MoM in June, while the smelting sector's demand for zinc concentrates remained solid, driving further decline in national zinc concentrate TCs this week. Currently, the market exhibited significant regional differentiation in transactions. This week, TCs for delivery to smelters in north China remained positive, but in south China, negative delivered TCs became increasingly prevalent, with some transactions for high-content ore heard as low as around -500 yuan/mt Zn.

Imported Ore Market. At present, the loss on imported zinc concentrates in China was maintained at around 1,500 yuan/mt Zn, but some actual transactions for imported ore still occurred this week. Recently, Gamsberg zinc concentrate port spot cargoes were heard transacted at around -$70/dmt, and a certain high-content zinc concentrate CIF transaction was heard at around -$80/dmt, with the contained metals priced separately. Additionally, Bisha zinc concentrate CIF offers were heard at around -$80/dmt for July/August shipment, and overall, the decline in imported ore TCs has not yet halted. Furthermore, according to SMM, in the current domestic imported zinc concentrate trade segment, some spot cargoes were already using the SMM Imported Zinc Concentrate Index for settlement and reference, marking the gradual implementation of this index and its integration into the industry's settlement and pricing system.

This week, SMM zinc concentrate inventories at China’s main ports totaled 301,000 mt in physical content, up 33,000 mt WoW, with Fangchenggang port inventories accounting for the major increase.