Smelter purchasing sentiment remains low, TCs hold steady in multiple regions [SMM Zinc Concentrates Weekly Review]

SMM February 6:

On a weekly basis, the average SMM Zn50 domestic TC remained flat WoW at 1,500 yuan/mt in metal content, while the SMM Imported Zinc Concentrate Index declined by $0.62/dmt WoW to $24.88/dmt.

Domestic ore market. Domestic smelters have largely completed their Chinese New Year stockpiling, resulting in relatively low demand for zinc concentrates. Spot transactions for domestic zinc concentrates were limited this week, and TCs in many regions saw relatively small changes. It is understood that due to the Chinese New Year holiday in February, domestic zinc concentrate production is expected to drop significantly MoM, while some smelters also halted operations for holiday maintenance. With both supply and demand for domestic zinc concentrates weak, zinc concentrate TCs remained at low levels.

Imported ore market. Smelters' purchase willingness for imported zinc concentrates remained low, with few transactions concluded during the week. Traders also offered limited quotes, and recent offers for standard zinc concentrates were heard around $20/dmt.

According to a release from Ivanhoe Mines on February 3, Ivanhoe Mines is in advanced discussions with DRC state-owned mining company Gécamines and metals and energy trading firm Mercuria to supply critical minerals from concentrates produced at the ultra-high-grade Kipushi zinc-lead-germanium-gallium mine in the DRC to the US. Under the proposed agreement, Mercuria's current offtake of Kipushi zinc concentrates would be allocated to Gécamines' trading arm, and additional production resulting from the successful debottlenecking and expansion in Q4 2025 would also be allocated. The production guidance for Kipushi in 2026 is set at 240,000–290,000 mt of zinc concentrates. Concentrates from the Kipushi mine also contain significant amounts of germanium and gallium, two highly strategic critical minerals. Gécamines has the potential to handle sales of up to 50% of Kipushi's concentrate production, including sales to the US.

This week, SMM zinc concentrate inventories at main ports in China totaled 352,500 mt in physical content, down 25,000 mt WoW, with Fangchenggang port contributing the majority of the decrease.