SHANGHAI, May 4 (SMM) – The 2018 annual benchmark zinc concentrate treatment charges (TCs) dropped 14.5% from that of 2017 to a 12-year low as supply dwindled.

The settlement at $147/dmt was delayed for two months and was reportedly reached between Teck Resources and Korea Zinc. This compared with TCs at $172/dmt last year.

Zinc concentrate supply has been declining over the past few years following the closures of the Century mine in Australia and Lisheen mine in Ireland in 2015. The two mines had a combined output of more than 630,000 mt.

TCs fell as smelters competed for supplies in a tight market. In China, the average TCs for imported spot zinc concentrated dipped to an all-time low at $12.5/mt in January this year, and only edged up to $20/mt as of May 1, SMM data showed.

In February, LME zinc prices soared to $3,595.5/mt, a record high since July 2007. Such high zinc prices are likely to drive restarts across mines.

In fact, the Century mine in Queensland is likely to resume operations in the third quarter after the investment by New Century Resources with an initial production rate of 8 million mt per year. Several other zinc concentrate projects were also heard to start production in the second half of this year.

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