Insight into Profit Patterns by Province: New Release of Zinc Smelting Profit Model by Province [SMM Analysis]

SMM News, May 29:

The zinc market in May 2026 is experiencing unprecedented structural pressures. Imported zinc concentrate TCs have fallen to -$56.25/dmt, while domestic TCs have dropped weekly to 400 yuan/mt Zn. Meanwhile, the sulphuric acid export control policy in May has continued to take effect, with prices of some 98% smelter acid in south China declining by around 300 yuan/mt, directly impacting an important by-product revenue source for smelters. LME zinc inventory of around 100,000 mt stands in stark contrast to China's social inventory exceeding 260,000 mt. The pattern of "tight ore and loose ingots" has made smelters the most squeezed segment in the industry chain. Against this backdrop, the true level of smelting profits can no longer be measured solely through the rough calculation of "ore price - zinc price - cost"—fluctuations in by-product revenue from sulphuric acid and minor metals often determine the positive or negative boundary of enterprise profits, representing a key variable that has been underestimated in current market analysis.

To further enrich data services for the zinc industry chain, SMM will, starting May 29, 2026, release new daily data on the refined zinc enterprise profit model (domestic ore), with data display beginning from January 2025 and updated every business day. The data covers daily profits across eight major zinc smelting regions: Inner Mongolia, Henan, Gansu, Hunan, Guangxi, Yunnan, Shaanxi, and Sichuan. Building on the existing profit framework, this SMM upgrade adds two key indicators—sulphuric acid revenue and minor metal revenue—delivering two complete profit calibers: profit including sulphuric acid, and profit including sulphuric acid and minor metals. Data can be queried independently by province, facilitating horizontal comparison of profit changes among smelters across different production regions.

The zinc smelter profit model includes:

Cost items:

Indicator	Description
Zinc ore loss	Zinc concentrate loss cost
Electricity cost	Smelting electricity cost
Roasting and leaching cost	Processing cost of roasting and leaching procedures
Auxiliary material cost	Smelting auxiliary material consumption cost
Taxes and others	Taxes and unforeseen costs

Revenue items:

Indicator	Description
Sulphuric acid revenue	By-product sulphuric acid revenue
Minor and precious metal revenue	Other minor and precious metal revenue (industry theoretical value)

Profit items:

Indicator	Description
Profit including sulphuric acid	Smelting profit covering sulphuric acid revenue
Profit including sulphuric acid and minor and precious metals	Smelting profit integrating all by-product revenues

Data applications:

Tracking smelting profit trends to assess smelter operating willingness and supply elasticity
Horizontal comparison of profit differences across provinces to identify regional spot arbitrage opportunities
Combining TC fluctuations to assist in forecasting the direction of the game between the ore side and the smelting side
Supporting industry research and market analysis

Data access:

You can log in to the SMM data terminal (URL: ) and view relevant data under the cost and profit section within the zinc-refined zinc category. Data will be updated on business days to ensure you receive the latest market information.

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Data Source Disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.