Zinc/Lead Market Weekly Updates - 2025/8/8

The SMM Imported Zinc Concentrate Index for this week is $82.25/dmt, with a 4.44% WoW increase.

The SMM Imported Lead Concentrate average spot TC for this week is $-60/dmt, unchanged WoW.

Spot Market & Tender Updates

• SHFE/LME ratio remained unfavorable this week, with TCs for imported zinc concentrate continuing to climb. Offers concluded at $80+/dmt CIF have become increasingly rare.

• One smelter reported receiving an offer at $85/dmt CIF for August shipment, but noted that the deal could not be closed, indicating that most players are still waiting for clarity around the August 12 tariff policy update. Near-term sentiment remains pessimistic toward import arbitrage, and if the ratio does not improve, TCs could potentially rise to the $100–120/dmt range later this year.

• Another smelter mentioned signing a domestic spot deal last week at RMB 3,750/mt DAP smelter, including some silver and lead content. Talks are ongoing for Russian concentrates, with a six-month long-term contract expected to be finalized next week.

• A market participant commented that import arbitrage is currently too weak. Port offers are reportedly at RMB 3,700–3,800/mt (ex-warehouse, self-pickup). There have been no notable shipments or deals heard recently in the imported zinc concentrate market. In addition, smelters producing LME-registered zinc ingots cannot take Iranian concentrates quoted in USD, due to sanctions, which also prevent those materials from entering the European market.

Global Mine & Smelter Insights

• On August 5th, critical metals producer Nyrstar announced it has secured A$135 million in transitional funding from the Australian federal, South Australian, and Tasmanian governments to sustain operations at its multi-metals smelters in Port Pirie and Hobart, and to advance redevelopment and critical metals projects. The funding follows broader industry calls for government support amid declining smelter margins, including from Glencore’s Mount Isa operations. Combined with continued investment from Trafigura, the support will allow Nyrstar to maintain operations while accelerating researches into producing germanium and indium in Hobart and antimony and bismuth in Port Pirie, with an antimony pilot plant as the initial priority. The package also includes funding for major maintenance and infrastructure upgrades, including furnace and wharf investments in Hobart and asset integrity works in Port Pirie.

• As Australia’s only lead refiner and largest zinc smelter, Nyrstar contributes around A$1.7 billion to the national economy annually, directly employing over 1,400 workers and supporting more than 6,600 indirect jobs. The company plays a key role in safeguarding Australia’s sovereign processing capacity. Nyrstar has committed to ongoing investment in its workforce and facilities while collaborating with governments on long-term strategic pathways. Zinc production in Hobart has been cut by 25% since April 2025, with no clear restart timeline.

Weekly SMM Data

• This week, zinc concentrate inventories at major Chinese ports totalled 308,000 tonnes, down by 25,500 tonnes from last week. As of Thursday, SMM surveyed social inventories across seven regions in China, totalling 113,200 tonnes, with a weekly build of 5,900 tonnes and a WoW increase of 10,000 tonnes. Downstream remains reluctant to purchase during the off-season in consumption.

• This week, lead concentrate inventories at major Chinese ports totalled 11,500 tonnes, down by 6,200 tonnes from last week. Previously arrived cargo has been picked up from the port so inventory drop back down. As of Thursday, social inventories across seven regions in China stood at 71,100 tonnes, with a weekly depletion of 800 tonnes and a WoW decrease of 1,900 tonnes. With SHFE lead prices going strong in recent days, downstream tends to take a wait-and-see approach, the depletion of lead social inventory is expected to decelerate.

• According to SMM, the production of primary lead stood at around 312.2kt, the operating rate of primary lead smelters in China stood at 70.95% in July 2024, down 1.8% MoM, with production recording a monthly decline. The decrease was mainly attributed to unexpected maintenance at a large-scale smelter in Central China, which weighed heavily on the overall output. In addition, tight lead concentrate supply continued to pressure treatment charges (TC), with SMM's monthly TC for imported Pb 60 concentrate falling to a range of -$70 to -$50/dmt, and some extreme transactions even reported as low as -$150/dmt. In the latter half of July, weaker lead prices further dampened smelters’ production enthusiasm. Some producers either scaled back output or delayed post-maintenance recovery due to limited raw materials. Looking ahead to August, although some smelters plan to resume or ramp up production, raw material shortages may persist. SMM conservatively estimates that the average operating rate will increase by around 3%.

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

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