Losses on Imported Zinc Ore Exceeded 2,000 yuan/mt, Import TCs Continued to Rise [SMM Zinc Concentrates Weekly Review]

SMM September 19:

On a weekly basis, the average SMM Zn50 domestic TC was flat WoW at 3,850 yuan/mt in metal content, while the SMM imported zinc concentrate index rose by $12.5/dmt WoW to $111.25/dmt.

In the spot market, losses on imported zinc ore widened to 2,000 yuan/mt this week. Given the price advantage, smelters continued to actively purchase domestic zinc ore, and zinc concentrate TCs are expected to be further reduced in October. Offers for imported zinc ore continued to rise, with recent reports of domestic smelters and traders concluding deals for Gamsberg zinc ore on a self pick-up basis at main ports, with TCs around $120/dmt. Recent offers for regular zinc ore reached $110-120/dmt, indicating sustained increases in import TCs. Additionally, the tender results for Dugald River zinc ore were recently announced, with the winning bid reportedly in the $60s/dmt. A zinc ore tender in North China this week concluded at 4,700 yuan/mt in metal content (including a 20-80 sharing), down 250 yuan/mt in metal content WoW. SMM will continue to monitor subsequent TC trends.

On September 17, Orion Minerals announced that its subsidiary Prieska Copper Zinc Mine Ltd and a wholly-owned subsidiary of Glencore signed an agreement securing $200-250 million in financing and a concentrate offtake agreement for the Prieska project. The offtake agreement entails Orion Minerals selling all zinc concentrates and copper concentrates produced from the mine to Glencore, with a term of 5 to 10 years. Orion Minerals is currently developing two projects: Prieska Copper Zinc Mine (PCZM) and Okiep Copper Project (OCP). The company plans to achieve first production at the PCZM project by the end of 2026 or early 2027, with an ambitious target to increase copper production to over 30,000 mt/year and zinc production to 65,000 mt/year once both projects reach stable operation.

This week, SMM zinc concentrate inventory at main ports in China totaled 423,500 mt, down 22,000 mt WoW, indicating a slight decrease in port inventory.