Zinc Concentrate TCs Rose in Some Regions in March, Focus on Subsequent Negotiation Results [SMM Zinc Concentrate Weekly Review]

SMM February 27:

On a weekly basis, the average SMM Zn50 domestic zinc concentrate TC rose by 50 yuan/mt in metal content WoW to 1,550 yuan/mt in metal content, while the SMM imported zinc concentrate index fell by $0.6/dmt WoW to $23.75/dmt.

Domestic ore market. Negotiations for March zinc concentrate TCs began this week in China, with adjustments diverging by region. Some mines and smelters in north China signed contracts for February-March, with TCs for March holding steady, while several regions in south China saw signs of increases. As domestic mines gradually resumed production after the Chinese New Year holiday, zinc concentrate supply in March is expected to increase. Meanwhile, continued arrivals of previously ordered imported zinc concentrates have kept raw material inventories at domestic smelters ample, further pushing up TCs in some regions for March.

Imported ore market. Although the Chinese New Year holiday ended, some zinc concentrate traders remained on holiday, resulting in fewer offers this week. In addition, due to the persistently low SHFE/LME price ratio, domestic zinc concentrate held a price advantage, leading to limited smelter interest in imported material and sluggish trading activity in the imported zinc concentrate market this week.

It was reported that recent heavy rainfall hit large inland areas of South Australia, parts of the Northern Territory, Queensland, and New South Wales. The Bureau of Meteorology warned that widespread storms would continue, with flood warnings issued in many areas and freight transport disruptions in some regions. Consequently, ore transportation in Australia was affected recently, with the recovery time currently unknown.

This week, SMM zinc concentrate inventories at main ports in China totaled 380,000 mt in physical content, up 48,000 mt in physical content WoW, with Lianyungang contributing the main increase.