Domestic Mine Maintenance and Production Halts, Zinc Concentrate Supply and Demand Unlikely to Improve in February [SMM Zinc Concentrate Weekly Review]

SMM January 23:

On a weekly basis, the average SMM Zn50 domestic TCs remained flat WoW at 1,500 yuan/mt in metal content, while the SMM Imported Zinc Concentrate Index dropped by $3.5/dmt WoW to $29.75/dmt.

Domestic ore market. As month-end approaches, some smelters and mines began negotiating zinc concentrate TCs for February this week. According to SMM, domestic smelters have completed their winter stockpiling, with overall raw material inventory levels relatively high. However, with the Chinese New Year holiday approaching, routine maintenance shutdowns at some domestic lead-zinc mines in January continued to weaken domestic zinc concentrate supply. The overall supply-demand pattern is expected to see little improvement in February.

Imported ore market. Offers and transactions for imported zinc concentrates remained scarce this week. It is understood that recent offers for standard zinc concentrates were around $20-30/dmt. Last week, the tender result for Antamina zinc concentrates was heard at around -$7/dmt, for a volume of 10,000 mt with a March shipment date. The decline in imported zinc concentrate TCs continued.

Nexa Resources stated that due to illegal road blockades by the Joraoniyoc community protests, the company has temporarily suspended production at the Atacocha San Gerardo open-pit mine. Nexa noted that there has been no material impact on overall production so far, but decided to halt mining, retaining only essential critical operations and maintenance work with minimal staffing to ensure facility upkeep. The company said it is adhering to existing agreements and maintaining active communication with local communities and government authorities to promote a peaceful resolution. The Atacocha mine's weekly zinc production is about 200 mt, accounting for less than 3% of Nexa's total zinc output.

This week, SMM zinc concentrate inventories at China's main ports totaled 296,500 mt in physical content, up 48,000 mt WoW, with Lianyungang and Fangchenggang ports contributing the main increases.