China Zinc Concentrate Prices Move in Opposite Directions

SHANGHAI Dec. 21 (CBI China)--China's major zinc concentrate markets were not acting uniformly over the past two weeks. In North China (Inner Mongolia, Shaanxi, Gansu and Qinghai Provinces) supply of zinc concentrate was sufficient, leaving most treatment charges unchanged at RMB 8,000 – 9,000/mt, but with some movement as high as RMB 9,500 – 10,000/mt.  However, in South China (Hunan, Sichuan, and Guangxi Provinces) supply tightened, with treatment charges generally within the RMB 7,500 – 8,500/mt range.

    Reasons

    The strength of North China mines improved greatly after merging, resulting in more influence over market pricing and higher product quality.  In contrast, mines in South China are small, and flourished in 2006 due to the bullish zinc market.  However, the recent sharp drop in zinc prices has caused many small mines to cut or halt production due to low profit margins and less market influence.