China Zinc/Lead Market Weekly Updates - 2025/7/4

The SMM Imported Zinc Concentrate Index for this week is $66.25/dmt, with a 1.53% WoW increase.

The SMM Imported Lead Concentrate average spot TC for this week is $-55/dmt, flat from the previous week's figure.

Spot Market & Tender Updates

• Domestic zinc smelters’ average raw material inventory has risen to around 30 days this week. With expectations for continued TCs increase, smelters remain cautious toward spot imported zinc concentrates. Coupled with the arrival of long-term contracted concentrates, trading activity in the spot market was notably subdued.

• Market sources reported a 10,000-tonne deal of Bisha zinc concentrate, reportedly sold by Trafigura at $70/dmt ex-port, with gold content being priced.

• A major Chinese smelter is currently in talks to purchase Ozernoye zinc concentrate at over $100/dmt, traded domestically after imported. The final TC could be around RMB 4,100/mt; a deal is expected next week.

• Ozernoye concentrate has seen limited downstream acceptance due to higher reagent usage during processing, potential environmental compliance risks, and elevated lead and impurity levels. The typical grade is Zn 41–42%, Pb 4–5%, with higher impurities—often requiring blending with cleaner concentrates.

Global Mine & Smelter Insights

• Huoshaoyun Mine Update (China)

Mining side: Output of mined ore at around 50kt in both May and June. Plans for July–September total 400kt, with July likely to be around 150kt. Mining is expected to pause mid-September, targeting a full-year output of 700–750kt (including carryover stock). Currently shipping concentrates with Zn grades >30%, Pb grades >6%, with notably high silicon and iron content.

Smelting side: The smelter was ignited on July 1st, targeting ore feeding by July 10–15, with first bulk of zinc ingots expected by late August or early September. Planned production for 2025 is still pending safety inspection in September. The 2025 production guidance remains at 50kt of zinc. Lead smelting will start after zinc slag becomes available, with full-year lead output expected around 10kt, mostly for Southwest China, unlikely to ship to East China.

• Nexa Resources announced on June 30th that its Cajamarquilla smelter in Peru has fully resumed operations, following a three-day labor suspension that ended with successful negotiations with the labour union of operator employees. The disruption does not affect the company’s 2025 sales guidance.

• Hindustan Zinc (HZL) released its Q1 FY2026 production results. They recorded a record Q1 mining output (Pb+Zn) of 265 kt, up 1% YoY, though lower QoQ due to regular mine preparation during the first quarter. Refined metals (Pb+Zn) productions total 250 kt, down 5% YoY and 7% QoQ due to plant maintenance. Hindustan Zinc Alloys, a wholly owned subsidiary, achieved historically high quarterly output of 5.1 kt.

Weekly SMM Data

Zinc:

• Port inventory of zinc concentrates rose slightly to 334 kt, up 0.9 kt WoW.

• Domestic social inventory of zinc ingots across seven major markets reached 82.4 kt, up 1.8 kt WoW, with consumption sluggish and restocking pace slowing.

• Given the supply-demand imbalance in July, zinc social inventory is expected to continue accumulating.

Lead:

• Nanjing port has been newly included in SMM’s sample, holding 10 kt, flat WoW. Total port inventory of lead concentrates across six key ports stood at 17 kt, unchanged WoW.

• Social inventory of lead ingots rose by 600 tonnes to 56.9 kt, amid increased selling interest on higher lead prices, while downstream buyers continued to purchase only as needed.

• As smelter maintenance winds down and consumption improves modestly, lead social inventory is expected to remain stable rather than rise significantly in July.

Author: Yueang He, Zinc & Lead Analyst of SMM UK

Contact: yueanghe@smm.cn | +44 (0)7522 173725