Smelters primarily purchase domestic zinc ore, TCs for both domestic and imported ore continue to decline [SMM Zinc Concentrates Weekly Review]

SMM December 12 news:

This week, domestic zinc concentrate TCs continued to decrease. On a weekly basis, the SMM Zn50 domestic weekly TC average fell by 250 yuan/mt in metal content WoW to 1,600 yuan/mt in metal content, and the SMM imported zinc concentrate index dropped by $7.19/dmt WoW to $50.56/dmt.

Domestic ore market. In winter, some mines in northern China successively suspended or cut production, and domestic zinc concentrate production continued to weaken MoM. However, zinc concentrate demand remained robust. Due to economic considerations, domestic smelters continued to scramble for domestic zinc concentrates this week, leading to further declines in zinc concentrate TCs in many regions. In the imported ore market, import losses for zinc concentrates were somewhat reduced during the week, but trader offers were limited, resulting in limited transactions for imported zinc ore. It is understood that recently, traders and smelters concluded deals for Dugald River zinc concentrates to be shipped in Q1, with a quotation period of M+2, at TCs around $50/dmt. Additionally, there were offers for regular zinc ore for Q1 next year around $40-50/dmt. This week, the downtrend in imported zinc concentrate TCs persisted.

MKK announced that its Hachinohe zinc/lead smelter ceased operations after a magnitude 7.6 earthquake on Monday evening (December 8). It is understood that the smelter has an annual capacity of 112,000 mt, and the shutdown is expected to be restored within six months. The smelter is expected to affect production by about 15,000 mt. However, the company plans to use inventory reserved during routine maintenance to cope with this reduction, and other smelters within the Mitsui Group may replace production. The actual impact is being continuously tracked by SMM.

This week, SMM zinc concentrate inventories at main ports in China totaled 312,000 mt in physical content, up 12,000 mt in physical content WoW, with Fangchenggang port inventories contributing the main increase.