Smelters Actively Compete for Domestic Ore, October Domestic Zinc Concentrate TCs Lowered [SMM Zinc Concentrate Weekly Review]

SMM September 26:

Domestic zinc concentrate TCs continued to decrease this week. On a weekly basis, the average SMM Zn50 domestic TC dropped 200 yuan/mt in metal content WoW to 3,650 yuan/mt in metal content, while the SMM Imported Zinc Concentrate Index rose $4.65/dmt WoW to $115.9/dmt.

In the spot market, as the month-end approached, domestic smelters and mines began negotiating zinc concentrate TCs for October. Smelters actively competed for domestic zinc ore, leading to lower TCs in many regions. For imported zinc ore, smelters' purchase willingness remained low, resulting in thin spot transactions this week. Some containerized zinc ore offers were heard rising to $140/dmt recently, and imported zinc concentrate TCs continued to climb. According to SMM, the decline in domestic TCs was driven by multiple factors: the low SHFE/LME price ratio kept import losses high at around 2,000 yuan/mt, prompting smelters to favor domestic ore; robust demand emerged ahead of winter stockpiling; and lower zinc prices strengthened domestic mines' inclination to reduce TCs to protect margins. Collectively, these pushed October domestic zinc concentrate TCs significantly lower. Additionally, a zinc ore tender in North China settled at 4,500 yuan/mt in metal content (including a 20/80 sharing), down 200 yuan/mt in metal content MoM. SMM will continue monitoring TC trends.

Rosh Pinah Zinc (RPZ) and Appian Capital Advisory Limited recently announced that RPZ secured $150 million in debt financing underwritten by Standard Bank to fund its RP2.0 expansion project. The RP2.0 project involves further development of the underground mine and construction of new surface facilities, including a new processing plant, paste backfill and water treatment plants, and a new portal with extended underground ore deposits. The project will nearly double the mine's zinc-in-metal production to 170 million pounds per year. Surface facility construction is now over 80% complete, remains within budget, and is expected to finish in Q3 2026, followed by ramp-up.

According to foreign media, Antamina mine's zinc output is set to grow 67% this year, offsetting a 12% decline in copper production, as management works to extend the deposit's life. This year, Antamina is projected to produce 450,000 mt of zinc, up from 270,000 mt last year, while copper output will drop from 430,000 mt to 380,000 mt, though it is expected to rebound to 450,000 mt in 2026.

This week, SMM zinc concentrate inventories at China's main ports totaled 339,300 mt, down 84,200 mt WoW. Fangchenggang Port contributed the bulk of the decrease, due to fewer vessel arrivals and accelerated cargo pick-up.