Review and Outlook of Zinc Concentrate Market in H1 2025[SMM Analysis]

SMM June 20 News:

As 2025 reaches its halfway point, reviewing the first half of the year, the domestic zinc concentrate market maintained a loose supply situation. As of June 27, domestic zinc concentrate TCs rose from 1,950 yuan/mt (metal content) at the beginning of the year to 3,800 yuan/mt (metal content), while imported zinc concentrate TCs increased from -$20/dmt at the beginning of the year to $65.25/dmt, with both domestic and imported zinc concentrate TCs climbing steadily.

New Capacity Continues to Ramp Up, but Raw Ore Grade Disturbances Persist

According to SMM data, domestic zinc concentrate production in January-May 2025 totaled 788,300 mt, a 0.06% YoY decrease. In terms of new capacity, some zinc mines that commenced production last year continued to ramp up production this year, and the Huoshaoyun mine also began producing in May this year, bringing a certain increase compared to last year. For existing capacity, following the Chinese New Year, lead-zinc mines in some northern regions of China gradually resumed production, with the overall resumption progress largely in line with market expectations, supporting a continuous increase in domestic zinc mine production in H1. However, due to disturbances in raw ore grades at some miners in certain domestic regions, production declined, coupled with reduced output from some mines nearing the end of their lifespans. With both increases and decreases, zinc mine production in H1 remained largely flat YoY.

Looking ahead to H2, the Huoshaoyun mine will continue to ramp up production, bringing a significant increase to domestic zinc mine production. Additionally, June is generally the tail end of domestic zinc mine resumptions. Considering the seasonal pattern of domestic zinc mine operations, production from these resumed mines will continue to recover in Q3, while Q4 coincides with the peak period for domestic zinc mine maintenance, coupled with the temporary shutdown of some northern mines at year-end. It is expected that zinc mine production will increase first and then decrease in H2, possibly reaching its annual peak in July/August.

Newly Commissioned and Expanded Zinc Mines Gradually Ramp Up Production, with Overseas Zinc Mine Production Expected to Increase by Approximately 400,000 mt YoY

In Q1, according to SMM's production statistics of 20 major overseas miners, the total zinc concentrate production of these 20 miners in Q1 2025 was 1.297 million mt, an increase of 78,800 mt (6.47%) compared to 1.2182 million mt in the same period last year. The main increases were due to the resumption of production at the Tara mine, the ramp-up of production at the Buenavista zinc mine and the Kipushi zinc mine, and the recovery of production at the Antamina zinc mine.

Entering Q2, there were not many disturbances in overseas zinc mines. Although the Antamina zinc mine suspended production in April due to an accident, it recovered quickly, with limited impact on production. Hudbay Minerals, a Canadian miner, suspended operations at its zinc mine due to wildfires, but due to the good operational performance of Snow Lake since the beginning of the year, it is expected to maintain its full-year operational guidance for 2025 unchanged. Furthermore, Australian miner Polymetals Resources Ltd announced that its Endeavor silver-zinc mine in the Cobar region of New South Wales has achieved commercial production, expected to bring a certain increase. SMM expects that with the continuous resumption of production at earlier mines and the continued ramp-up of newly commissioned mines, zinc mine production will continue to grow significantly YoY in Q2.

Significant Increase in Overseas Zinc Mine Output Drives Recovery in China's Imported Zinc concentrate Volume

According to data from the General Administration of Customs, the cumulative imports of zinc concentrate from January to May 2025 reached 2.204 million mt (in physical tons), representing a cumulative year-on-year (YoY) increase of 52.46%. On one hand, the significant growth in overseas zinc mine output this year has led to a substantial influx of zinc concentrate from mines such as kipushi, oz, and Antamina into the domestic market. Additionally, the gradual recovery in domestic smelter production in the first half of the year, coupled with the rising demand for zinc concentrate raw materials on a month-on-month (MoM) basis, has spurred smelters to continuously purchase imported zinc concentrate to replenish their raw material inventories.

Looking ahead to the second half of the year, although the current enthusiasm of domestic smelters for purchasing imported zinc concentrate is not strong, with the sustained increase in domestic smelter production and the gradual arrival of long-term contracts for imported zinc concentrate purchased by smelters in the early stage, it is expected that the volume of imported zinc concentrate in China will remain at a high level in the second half of the year.

In summary, with the recovery of domestic zinc mine output and the substantial influx of imported zinc concentrate, the domestic zinc concentrate market supply has remained consistently adequate, driving the continuous increase in zinc concentrate TCs in the first half of the year. Looking ahead to the second half of the year, with the gradual commissioning of new capacities from companies such as Yuntong and Wanyang, it is expected that the demand for zinc concentrate from smelters will increase significantly. If the volume of imported zinc concentrate cannot be maintained, the potential for further increases in zinc concentrate TCs in the second half of the year is expected to be limited, and there may even be a risk of a certain decline.

(The above information is based on market collection and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only. This article does not constitute direct advice for investment research and decision-making. Customers should make cautious decisions and should not replace their independent judgment with this information. Any decisions made by customers are not related to SMM.)