China Zinc/Lead Market Weekly Updates - 2025/7/11

The SMM Imported Zinc Concentrate Index for this week is $66.48/dmt, with a 0.35% 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

• Spot trading activity in the Chinese imported zinc market remained subdued this week due to unfavorable SHFE/LME ratio. Market participants believe that treatment charges (TCs) in China are significantly higher than the TC in ex-China this year, prompting some sellers to divert concentrate shipments overseas. Whether this dynamic will lead to lower domestic TCs next year remains uncertain.

• Ozernoye: At least 20,000 tonnes of Ozernoye concentrate remain stockpiled in Manzhouli Port (In land). The zinc grade has declined from the previous 45% to around 41%, while lead content in some batches has reached as high as 9%. Ozernoye side claims that lead levels may decline around September. At present, even offers at around $120/dmt have found no buyers, as smelters are increasingly seeking higher-grade raw material. Significant volumes of Ozernoye are still available at Jinzhou port, with additional stock also reported in Fangcheng port, where quotes are slightly above $100/dmt.

• Kipushi: Market sources indicate that CITIC Metal’s portion of Kipushi zinc concentrate has largely arrived in China, whereas Trafigura's allocation is not coming to China. Shipments this year are primarily under long-term contracts. According to SMM's prior conversation with the CITIC, Kipushi’s average annual zinc concentrate production capacity is estimated at 300,000 tonnes of metal contents, with CITIC holding around 150,000 tonnes and the other half allocated to Trafigura. Should Kipushi further expand beyond 300,000 tpa, Ivanhoe is expected to bring in a third offtaker for future marketing.

• Around 20,000 tonnes of zinc concentrate from Iran is currently being quoted at RMB 3,800/tonne. Due to U.S. Sanctions, Iranian material cannot be imported directly and traded in USD, instead it is converted to domestic trade within China.

Global Mine & Smelter Insights

• This week, multiple market sources reported to SMM that Teck has reached an agreement with Chinese buyers regarding the tariff on Red Dog lead concentrate. The cost will reportedly be shared equally between Teck and the Chinese buyers. While this information is still pending the final verification, SMM estimates that this arrangement effectively translates to a cost of around -$150/dmt when reflected in the TC. Despite a tight spot market, such concessions on long-term contracts would be a significant reflection on the persistent tightness in Chinese lead concentrate supply. As for Red Dog’s zinc concentrate, there has been no confirmed update on the cost-sharing of tariff. Considering the current situation in the Chinese zinc concentrate market where supply is sufficient for zinc smelters, it is very likely that Teck will end up having to take most of the cost incurred by the tariff or even redirect the 100kt of zinc in concentrate elsewhere to ex-China markets, which they are more than capable of doing.

• On July 10 (local time), Hudbay Minerals announced a controlled suspension of operations at its Snow Lake site in response to a newly issued mandatory wildfire evacuation order in northern Manitoba. The move aims to ensure employee safety and comply with local regulations. Hudbay stated that its Snow Lake infrastructure faces a low risk of damage from the ongoing wildfires. Operations in the Flin Flon region remain unaffected, though certain exploration activities near Snow Lake have been temporarily halted. This marks the second evacuation-related suspension at Snow Lake this summer. Hudbay initially paused operations on June 4 due to wildfires and gradually resumed mine and mill production between June 14–16 as conditions improved. However, the worsening fire situation prompted the Manitoba government to reissue an evacuation order on July 10, leading to this renewed operational halt. Despite the short-term disruption, Hudbay maintains its 2025 full-year production guidance for the Manitoba region, with output expected to remain within the range of 21,000–27,000 tonnes of zinc in concentrate.

• On July 8, Ivanhoe Mines provided a Q2 2025 production update, reporting that its Kipushi zinc concentrator in the DRC produced 41,800 tonnes of zinc in concentrate during the quarter. In June, ore throughput fell due to a nine-day shutdown for the first phase of the debottlenecking program and the temporary processing of lower-grade ore. A second phase of upgrades is scheduled for August, with a seven-day shutdown planned to complete all remaining work. Upon completion, the concentrator’s annual throughput capacity will rise from 800,000 to 960,000 tonnes. Despite Q2 disruptions, Ivanhoe maintains its full-year zinc production guidance at 180,000–240,000 tonnes of zinc in concentrate, citing a strong ramp-up in the second half. In H1 2025, production totalled around 85,000 tonnes of zinc in concentrate.

Weekly SMM Data

• Zinc concentrate stocks at major Chinese ports totaled 333,000 tonnes this week, down slightly by 1,000 tonnes WoW. As of Thursday, social inventory across seven major regions stood at 90,300 tonnes, up by 1,200 tonnes within the week, 7,900 tonnes WoW. Downstream demand remained weak amid the traditional off-season, with sluggish procurement activity. The pace of inventory destocking has slowed, and social inventories are expected to continue rising through July.

• Lead concentrate inventories at major Chinese ports declined by 3,000 tonnes WoW to 14,000 tonnes. Meanwhile, as of Thursday, social inventory across seven key regions rose by 4,200 tonnes WoW to a total of 61,100 tonnes, with a 3,200 tonnes increase within the week. With lead prices fluctuating at elevated levels, downstream buyers remain cautious. Additionally, the delivery date of the SHFE 2507 lead contract is coming next week and a spot-futures price gap exceeding RMB 200/tonne have prompted some lead holders to consider delivery to warehouse, contributing to the increase in social inventory. Inventory is expected to keep climbing ahead of the contract delivery date.

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

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