TCs finalised by smelters in some regions, continuing to rise in July [SMM Zinc Concentrates Weekly Review]

SMM News on June 27:

In July, zinc concentrate TCs continued to rise. The average monthly domestic zinc concentrate TC of SMM increased by 200 yuan/mt (metal content) MoM to 3,850 yuan/mt (metal content). Looking at weekly prices, the average weekly domestic Zn50 TC of SMM increased by 200 yuan/mt (metal content) MoM to 3,800 yuan/mt (metal content), and the SMM Imported Zinc Concentrate Index increased by $9.98/dmt MoM to $65.25/dmt.

In the spot ore market, month-end coincided with the peak period for domestic smelters' TC negotiations. Currently, zinc concentrate TCs have been finalised in some regions, with overall prices increasing by 100-200 yuan/mt (metal content) MoM compared to June. Smelters still primarily source domestic zinc ore for raw material procurement. Regarding imported zinc ore, the SHFE/LME price ratio continued to deteriorate. This week, transactions of imported zinc ore remained sluggish. It was heard that smelters and traders had closed deals for Antamina zinc ore with shipments scheduled for August/September, with a transaction TC of around $50 and a cargo volume of 10,000 mt. Additionally, it was recently heard that high-grade containerised zinc ore was traded at around $60, while offers for regular containerised zinc ore were heard at $70-80/dmt. Imported zinc concentrate TCs continued to rise, and SMM will continue to monitor subsequent TC adjustments.

According to foreign media reports, the workers' union at Nexa's only Cajamarquilla zinc smelter in Peru, with an annual capacity of 344,000 mt, announced a strike on June 25 after negotiations with the company for a pay raise failed. The resumption time will depend on the progress of subsequent negotiations. This strike is expected to directly impact global refined zinc production and provide some support to zinc prices.

This week, the total inventory of zinc concentrates at SMM's main ports in China was 313,000 mt, a decrease of 12,000 mt WoW. Port zinc ore inventory decreased slightly.

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