The SHFE/LME price ratio continued to decline, and transactions of imported zinc ore were sluggish [SMM Weekly Zinc Concentrates Review]

SMM News on July 11:

This week, domestic zinc concentrate TCs remained stable, while imported zinc concentrate TCs increased MoM. Specifically, the weekly average SMM Zn50 domestic TC price remained unchanged MoM at 3,800 yuan/mt (metal content), and the SMM Imported Zinc Concentrate Index rose by 0.23 US dollars/dmt MoM to 66.48 US dollars/dmt.

In the spot ore market, with the implementation of domestic zinc concentrate TCs in multiple regions, smelters primarily focused on executing previous contracts, and domestic zinc concentrate TCs remained basically stable this week. Trading activity for imported zinc ore was sluggish during the week. As the SHFE/LME price ratio deteriorated, traders showed low enthusiasm for offering zinc ore, while smelters, having sufficient raw materials, had little interest in purchasing imported zinc ore. According to SMM, Russian oz zinc ore continued to flow into the domestic market in July, with recent offers exceeding 100 US dollars/dmt. Additionally, a recent tender result for a zinc mine in northern China was 5,450 yuan/mt (including a 20% royalty). SMM will continue to monitor subsequent changes in TCs.

In its Q2 production update on July 8, Ivanhoe Mines disclosed that the beneficiation plant at its Kipushi zinc mine in the DRC produced a total of 41,800 mt of zinc concentrates in Q2 2025. In June, due to a 9-day shutdown for the first-stage capacity bottleneck upgrade and the need to process low-grade ore, monthly ore processing volume decreased to approximately 41,100 mt, with a decline in grade. The shutdown was primarily for upgrading the tailings pump system to ensure sustainable operation at designed capacity. Meanwhile, the dense media separation (DMS) system was upgraded to address previous blockages caused by excessive ore powder content. After the upgrade, the daily average available time of the DMS system increased from 6 hours to 16 hours, significantly reducing unplanned downtime. Ivanhoe expects to conduct a second-stage equipment upgrade in August, which will involve a 7-day shutdown to complete all remaining work. After completion, the annual processing capacity of the beneficiation plant will increase from 800,000 mt to 960,000 mt, and the available time of the DMS system is expected to further increase to 22 hours/day. Despite some disruptions in Q2, Ivanhoe stated that production will significantly increase in H2. Therefore, the full-year zinc production guidance for Kipushi remains unchanged at 180,000–240,000 mt (metal content).

This week, the total inventory of SMM zinc concentrates at China's main ports was 333,000 mt, a decrease of 1,000 mt WoW, indicating a slight decline in port zinc ore inventory.

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