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[SMM analysis] after falling for half a year, the TC of domestic zinc concentrate is finally up! Is there any heresy?
Jul 8,2020 17:53CST
[SMM analysis: there is still room for short-term upward adjustment of domestic zinc concentrate TC for the first time since the beginning of the year]
The content below was translated by Tencent automatically for reference.

SMM7: since 2020, due to the spread of the global new crown epidemic, zinc prices have hit a new low and plummeted to 14265 yuan per ton, resulting in some mines in a state of loss or production without sales, resulting in tight supply at the mine end. Since March 20, the TC of domestic zinc concentrate has continued to decline, falling to 5000 yuan / metal ton from the high of 6250 yuan / metal ton at the beginning of the year, but as of the week of July 3, the processing fee of domestic zinc concentrate is 5150 yuan / metal ton, which is 150 yuan / ton higher than that of June 26, and the TC of imported mine is US $160 / dry ton, which is 10 US dollars / dry ton higher than that of June 26. SMM believes that the TC of domestic zinc concentrate may still be up-regulated in the short term, but the change of TC of imported ore is relatively limited.

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On the domestic side, since zinc prices bottomed out at the end of March, the profits of domestic mines have been repaired, the willingness to ship goods has increased, the problem of supply at the mine end has been gradually alleviated, the inventory level of raw materials in smelters has returned to normal, and the average inventory days of raw materials have basically been more than 25 days. the problem of raw material shortage in smelters has been basically alleviated, so the processing fee for domestic zinc concentrate was raised in July.

Overseas, countries have started their economies one after another, and mines have gradually resumed work and production. For example, Mitsui Mining of Japan resumes the operation of two zinc mines in Peru; the Antamina copper-zinc mine in Peru currently has an operating capacity of 80% and is expected to operate at full capacity in the third quarter, but it will take some time for the actual domestic supply due to transport constraints; in addition, the failure of a loading barge at the loading port of Teck resources Red Dog mine is expected to affect one-month port shipments, which will further affect the inflow of imported mines. Therefore, the change of TC of short-term imported ore is limited.

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