SHFE/LME price ratio remains low, while TCs for imported zinc ore continue to rise [SMM Weekly Review of Zinc Concentrates]

SMM reported on August 15:

This week, domestic zinc concentrate TCs remained stable, while imported zinc concentrate TCs increased on a WoW basis. Specifically, the weekly average SMM Zn50 domestic TC price remained unchanged at 3,900 yuan/mt (metal content) on a WoW basis, and the SMM Imported Zinc Concentrate Index rose by $8.05/dmt to $90.3/dmt on a WoW basis.

In the spot market, domestic smelters' new purchases of zinc ore were limited this week, with most adhering to previous contracts. Overall, TCs remained stable. For imported zinc ore, with LME outperforming SHFE in zinc prices, losses from imported zinc ore expanded to over 1,000 yuan/mt this week. Smelters had low purchase willingness, and transactions for imported zinc ore remained sluggish. It was heard during the week that offers for imported zinc ore continued to rise, with domestic offers for common zinc ore increasing to over $90/dmt, and offers for some zinc-rich ores reaching around $80/dmt. Imported zinc concentrate TCs continued to rise.

According to the National Standards Full-Text Disclosure System, the State Administration for Market Regulation and the Standardization Administration of China issued the new version of the "Specification for the Limit of Harmful Elements in Heavy Non-Ferrous Metal Concentrates" (GB/T20424-2025) on February 28, 2025, which is scheduled to be implemented on September 1, 2025. Regarding zinc concentrates, the new standard mainly revised the limit of As in zinc concentrates from 0.60% to 0.50%, and added a limit of 0.02% for Tl in zinc concentrates and mixed lead-zinc concentrates. According to SMM's communication with major domestic zinc ore importing enterprises, this standard revision is expected to have no significant impact on China's zinc ore imports. SMM will continue to monitor subsequent developments.

On August 12, Nexa Resources, a South American miner, announced that its Cerro Pasco complex, which includes the Atacocha and El Porvenir mines, was partially and temporarily shut down due to an illegal blockade by a minority of individuals from the San Juan de Milpo community. This blockade was part of a protest and has not yet had a substantial impact on production, with the mine only maintaining critical operations such as safety and maintenance. Nexa stated that it would continue constructive dialogue with the community and relevant authorities to resolve the incident peacefully and as soon as possible, and reiterated its commitment to the social and economic development of the communities in which it operates. The Cerro Pasco complex produces approximately 1,200 mt of zinc per week. According to the company's latest guidance, El Porvenir is expected to produce 53,000-62,000 mt (metal content) of zinc concentrates and 21,000-26,000 mt (metal content) of lead concentrates in 2025, while Atacocha is expected to produce 10,000-12,000 mt (metal content) of zinc concentrates and 13,000 mt (metal content) of lead concentrates. Currently, this guidance remains unchanged. SMM will continue to monitor the subsequent developments and update the latest progress.

This week, the total inventory of zinc concentrates at SMM's main ports in China was 354,000 mt, an increase of 46,000 mt from the previous week, indicating a rise in port zinc ore inventory.