Zinc/Lead Market Weekly Updates - 2025/12/19

The SMM Imported Zinc Concentrate Index for this week is $50.13/dmt, with a 11.8% WoW decrease. Meanwhile, SMM Zn50 zinc concentrate domestic weekly average TC runs at around 1600rmb/dmt. This week, deficit on China’s zinc concentrate import arb narrowed significantly and turned positive, reopening the import arbitrage window for the first time in around six months. At present, the price spread between imported and domestic zinc concentrates has largely converged, easing smelters’ buying appetite for domestic material. Meanwhile, treatment charges across multiple regions in China have shown signs of stabilising, with the recent downtrend temporarily coming to a halt.

The SMM Imported Lead Concentrate average spot TC for this week is still at $-135/dmt, unchanged WoW. Unfortunately that is still indicating a very tight spot market for lead concentrate.

Global Mine & Smelter News Flash

• Kazzinc Ltd. is set to open its metal sales to rival traders as governments push for greater control and revenue from natural resources. According to sources, Kazzinc has issued a tender covering all of its 2026 copper production, with further tenders planned for zinc and other metals under a new marketing model launching next year. Glencore will retain the right to match the best competing bid, but the move highlights intensifying competition for high-quality supply as more capital flows into metals trading. Kazzinc is among the world’s largest zinc and lead producers, and also a significant supplier of copper, gold and silver. Glencore has historically marketed all of Kazzinc’s output, reinforcing its leading position in zinc and lead trading, but has faced rising competition from Trafigura Group. The shift comes amid potential changes in ownership, with Kazakh businessman Shakhmurat Mutalip reportedly in talks to acquire Glencore’s 70% stake in Kazzinc. More broadly, resource-rich countries are taking a more active role in metal sales: Zambia and the Democratic Republic of Congo have both entered trading partnerships with Mercuria Energy Group, reflecting a global trend toward tighter state involvement in mineral marketing.

• Nyrstar announced on December 15th that it has entered into an agreement with Korea Zinc regarding a transaction involving the East Tennessee and Middle Tennessee mining complexes and the Clarksville zinc smelter in the US state of Tennessee, which are currently owned or operated by Nyrstar. Under the terms of the proposed deal, Korea Zinc plans to acquire the fully permitted sites in Tennessee and develop a new large-scale, fully integrated smelting facility in Clarksville. The transaction remains subject to customary conditions, including regulatory approvals, and is expected to close in the first half of 2026. Under the agreement, zinc metal production from the Clarksville smelter in 2026 will continue to be sold to Trafigura. The Clarksville smelter is currently the only primary zinc smelter in the United States and has been in operation for nearly 50 years. Together with the associated East and Middle Tennessee mining complexes, the assets form a key domestic US mine-to-metals value chain. The operations benefit from highly skilled workforce, favourable geological and operating conditions, strong logistics and relatively low power costs, which add to the overall asset value. Nyrstar will continue to invest in its smelting operations in Australia and Europe, while working closely with the US administration to support the development of critical minerals supply chains. This includes continued support for the US–Australia Critical Minerals and Rare Earth Project Pipeline.

• Variscan Mines said it has received official approval from the Government of Cantabria for its Preliminary Mining Plan (“Anteproyecto”) covering the San Jose and Udias mining licences within its Novales-Udias Project in northern Spain. The company said the Anteproyecto is a significant permitting milestone as it authorises the pre-works and development activities required to enable a restart of the former-producing San Jose mine. It also provides approval to proceed with underground trial mining and small-scale exploitation, alongside adaptation of existing facilities and in-situ infrastructure focused on mine access, transport, electrical installation, drainage and underground safety. Variscan said the approval builds on permits already granted, including the Mining Licence (valid to 2035 with an extension option), the Restoration Plan and the annual Plan de Labores. The company noted that additional permitting workstreams are ongoing, including the Environmental Impact Assessment (EIA), and that a Final Mining Plan will be submitted after publication of the Mine Restart Study, implementation of its recommendations and EIA approval.

Weekly SMM Data

• This week, zinc concentrate inventories at major Chinese ports totalled 337,000 tonnes, up by 25,000 tonnes from last week. As of Thursday, SMM surveyed social inventories across seven regions in China, totalling 122,200 tonnes, with a drop of 3,500 tonnes within the week and a WoW drop of 6,000 tonnes. Smelter production is widely reducing due to the cost issue, which leads to the constant destocking behaviour observed in Chinese social inventory lately.

• This week, lead concentrate inventories at major Chinese ports totalled 37,000 tonnes, increased by 21,700 tonnes from last week. As of Thursday, social inventories across seven regions in China stood at 20,500 tonnes, unchanged WoW and with a depletion of 1,400 tonnes within the week. This week, lead smelters resumed production, while some large downstream consumers are expected to suspend procurement. However, pre-holiday inventory drawdowns by traders are still ongoing, and social warehouse stocks are therefore likely to remain at low levels.

• The official data for Chinese zinc ingot export in November is out. In november total zinc ingot export stood at 42,816 tons, with a MoM increase of 402.61% and a YoY increase of 8748.45%, with top 3 countries/regions being Taiwan,China (18.1kt, 42.37%), Singapore (14.5kt, 33.87%) and Hong Kong, China (4.5kt, 10.41%). In the first 11 months, China exported 66,936 tons of zinc ingots, with a YoY increase of 437.49%. Overall, the export window has opened, with shipments mainly delivered to Southeast Asian delivery points. In addition, direct flows into downstream consumers in other Southeast Asian countries have also contributed incremental volumes. On the fundamentals side, as China’s export volumes have been gradually realised and deliveries from previously hidden inventories have been released, LME inventories have surged to around 100 kt. The LME Cash–3M backwardation has come to an end, and associated structural risks have eased.

• Domestically, zinc concentrate treatment charges have continued to fall to around RMB 1,500 per tonne of metal. Tight raw material supply has led to more smelter production cuts and maintenance, pushing output lower, while refined zinc inventories have kept declining. Against a backdrop of relative domestic strength and external weakness, the SHFE/LME ratio has rebounded. Although refined zinc imports remain loss-making at around RMB 2,000 per tonne, the export window has closed completely. In December, refined zinc export volumes are projected to decline to around 10–20 kt.

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

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