China's supply-side disruptions occurred frequently, and in August, zinc concentrate TCs fell in many regions in China [SMM Zinc Concentrates Weekly Review]

SMM July 31 News:

From a weekly perspective, the average weekly domestic TC for SMM Zn50 fell 400 yuan/mt Zn WoW to -1,150 yuan/mt Zn, while the SMM Imported Zinc Concentrate Index (weekly) decreased $3.5/dmt WoW to -$98.13/dmt. On a monthly basis, the SMM Imported Zinc Concentrate Index dropped $17.01/dmt MoM in July to -$89.81/dmt.

Domestic Ore Market. This week coincides with the peak of August domestic zinc concentrate TC negotiations. However, recent supply-side disruptions have been frequent, with some mines halting production due to issues and reduced operating rates at others after meeting annual profit targets. Overall supply-demand for domestic zinc concentrates remained tight in August, as smelters actively scrambled for domestic ore, driving TCs lower across many regions. Currently, domestic smelters’ profits are largely supported by sulphuric acid and by-products, prompting aggressive purchases of high-impurity zinc concentrates. Market sources indicate that transaction TCs for high-impurity zinc concentrates in some regions have fallen as low as -2,000 yuan/mt Zn in August.

Imported Ore Market. The SHFE/LME zinc price ratio deteriorated further recently, weakening the economics of imported zinc concentrates. Smelters continued to rely mainly on domestic ore for procurement, leaving spot imported zinc concentrate transactions relatively limited this week, with overall TCs staying at low levels. According to market reports, some traders and smelters concluded deals for Q4 imported zinc concentrates at TCs of around -$100 to -$110/dmt, while certain high-impurity zinc concentrates were traded at TCs near -$120/dmt. Additionally, the results of a recent BVC zinc concentrate tender were announced, with a winning bid price heard at -$150 to -$160/dmt for August shipment, totaling approximately 10,000 mt.

On July 28 Japan time, a magnitude 7.1 earthquake struck southern Kumamoto Prefecture, followed by multiple aftershocks. According to SMM, there are four major zinc smelters in Japan, with a combined production of 375,000 mt in 2025. Based on their geographical locations, these smelters are outside the earthquake zone, and their main smelting operations have not been affected.

This week, total SMM zinc concentrate inventories at major Chinese ports stood at 284,000 mt in physical content, down 5,000 mt WoW, with Lianyungang contributing most of the decline.