Large Arrivals of Imported Zinc Ore, Processing Fees May Continue to Rise in June [SMM Zinc Concentrates Weekly Review]

SMM News on May 23:

In June, domestic zinc concentrate TCs continued to rise. The average monthly domestic zinc concentrate TC (SMM Zn50) increased by 150 yuan/mt (metal content) WoW to 3,650 yuan/mt (metal content), while the average monthly imported zinc concentrate TC (SMM Zn50) rose by US$10/dmt WoW to US$55/dmt. On a weekly basis, the average weekly domestic zinc concentrate TC (SMM Zn50) remained flat at 3,500 yuan/mt (metal content), and the average weekly imported zinc concentrate TC (SMM Zn50) also remained flat at US$45/dmt WoW.

In the spot ore market, the import window for zinc ore remained closed this week, with almost no offers or transactions for imported zinc ore. Domestic zinc ore contracts signed earlier continued to be executed, and weekly zinc concentrate TCs remained stable. From a supply and demand perspective, zinc ore imports in April increased by 37.6% MoM to 490,000 mt, significantly exceeding market expectations. Recently, a large amount of oz zinc ore has also arrived in China, further supplementing the zinc ore supply in the market. With relatively loose zinc ore supply, smelters' sentiment to refuse to budge on prices persisted, and they continued to be bullish on zinc concentrate TCs in June. In addition, the tender result for a certain zinc mine in North China recently was 5,700 yuan/mt, an increase of 300 yuan/mt WoW. SMM will continue to monitor subsequent changes in TCs.

According to local government officials in the Tuva Republic of Russia, Kyzyl-Tashtyg (Longxing), a lead-zinc mine in Russia controlled by Zijin Mining, will cancel its plan to suspend operations in June, and the company will maintain normal mine operations. Previously, due to factors such as the escalation of Western sanctions and settlement restrictions imposed by Chinese banks on Russia, Li Kaiwen, the general manager of LLC Lunsin, which operates the mine under Zijin, had signed an order earlier in May to consider suspending the mine's operations. Zijin Mining owns 70% of the mine. In 2024, the mine produced approximately 71,300 mt (metal content) of zinc concentrates and about 4,750 mt of lead concentrates.

This week, the total inventory of zinc concentrates at SMM's main ports in China was 358,000 mt, a decrease of 22,000 mt WoW, indicating a slight decline in zinc ore inventory at the ports.

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