Zinc Calcine Prices Under Pressure in December, Zinc Concentrate TCs Rise Expectations Strengthen [SMM Analysis]

On the raw material front: Current raw material prices remain high, and enterprise profits are significantly under pressure. Although some enterprises plan maintenance shutdowns, the suspension of secondary zinc enterprises due to profit issues has led to zinc calcine originally intended for internal use re-entering the market, resulting in an increase in the circulation of zinc calcine in December. However, as some zinc calcine producers underwent synchronized maintenance, actual production declined.

Demand side, in December, secondary zinc smelters intensified production cuts and expanded maintenance due to worsening profit losses. Meanwhile, import profits for zinc concentrates improved, leading smelters to increase purchases of imported ore, which alleviated raw material pressure. Although TCs remained relatively low, ore profits were better. Overall, demand for zinc calcine saw a significant pullback, and TCs subsequently rose.

Entering January, the scale of maintenance at zinc calcine plants further expanded, and production is expected to continue shrinking. However, boosted by stronger zinc prices, enterprises' willingness to sell zinc calcine increased, potentially leading to a further rise in market circulation, thereby putting downward pressure on zinc calcine prices and driving TCs upward. The trend of maintenance and production cuts at secondary zinc plants continues, and weak demand conditions are unlikely to change. Zinc calcine prices are expected to maintain a downward trend, while TCs may climb further.