Smelters Mainly Purchase Domestic Ore, TCs in Many Regions Continue to Decline [SMM Zinc Concentrates Weekly Review]

SMM, July 17:

On a weekly basis, the average weekly domestic SMM Zn50 TCs fell by 150 yuan/mt Zn WoW to -750 yuan/mt Zn, while the SMM Imported Zinc Concentrate Index dropped by $6.85/dmt WoW to -$90.15/dmt.

Domestic ore market. Domestic zinc smelters continued to purchase zinc concentrates this week, with many regions reporting further declines in domestic zinc concentrate TC transaction prices. The mainstream transaction range for domestic TCs has now fallen to -500 to -1,000 yuan/mt Zn. It is understood that sulphuric acid prices across many regions in China have recently been in the 1,500-1,900 yuan/mt range, persistently high prices that continue to support domestic smelter margins. The tight domestic ore supply pattern remained unchanged in July, and with the SHFE/LME price ratio persistently low, smelters still mainly purchased domestic zinc concentrates.

Imported ore market. Ore traders were relatively inactive in offering cargoes this week, with overall offers for imported zinc concentrates mostly around -100 to -130 $/dmt. However, the economics of imported ore remained poor, prompting smelters to primarily purchase domestic ore, and overall transaction activity in the imported ore market was muted this week. Market sources reported that a recent offer for zinc concentrates at Gamsberg port was at -100 $/dmt, while other market participants noted that actual transactions for imported zinc concentrates in China recently concluded around -100 $/dmt, with the overall downward trend in imported TCs continuing.

Silver Mountain Resources recently announced that it has officially commenced beneficiation plant commissioning at its Reliquias silver-zinc-lead polymetallic mine in Peru's Huancavelica region. The beneficiation plant rehabilitation is currently approximately 95% complete, and the project still plans to achieve first production in Q3 2026. The company reported that the crushing system is now operational, and the grinding and flotation circuits have completed no-load testing. Industrial trial runs using low-grade ore are currently underway to optimize equipment operating parameters.

This week, total zinc concentrate inventories at main Chinese ports, as tracked by SMM, stood at 299,900 mt in physical content, down by 14,100 mt WoW, with Fangchenggang port inventories accounting for the majority of the decrease.