Smelters show little willingness to further cut TCs, awaiting post-holiday pricing results [SMM Zinc Concentrates Weekly Review]

SMM, September 24:

On a weekly basis, the SMM Zn50 domestic weekly average TC was flat WoW at -2,100 yuan/mt Zn, while the SMM imported zinc concentrate index fell $1.55/dmt WoW to -$130.40/dmt.

Domestic ore market. With month-end approaching, domestic smelters and mines have begun preliminary contact and negotiations on October TCs this week, and the two sides currently hold divergent expectations. On the demand side, domestic sulphuric acid prices have declined notably in recent months, with prices in some regions even falling below 1,000 yuan/mt. Smelter margins continue to be squeezed, and smelters are reluctant to accept further TC cuts for October. However, the supply side has yet to show a clear recovery, and the overall ore supply-demand pattern in October is unlikely to improve significantly.

Imported ore market. With the dual holidays approaching, ore traders offered few quotes this week. However, losses on imported ore have narrowed significantly compared with early September, and with winter stockpiling demand prompting more inquiries from some domestic smelters, ore traders in the market have continued to lower their TC offers. According to market sources, recent offers for some South American containerized rich ore were around -$130 to -$140/dmt, while offers for New Century zinc concentrates were around -$160/dmt.

On September 16, Volcan Compañía Minera disclosed that its Romina polymetallic mine project is planned to operate until 2038 and will form an integrated production system with the existing Alpamarca mining unit. The project is located in Huaral Province, Peru, at an altitude of over 4,000 meters, and will use a combination of underground and open-pit mining methods. Ore produced will be transported to the Alpamarca beneficiation plant in the Junín region for processing. The Alpamarca beneficiation plant currently has an installed processing capacity of 2,500 mt/day, and Volcan is continuing to upgrade the facility to accommodate the processing needs of Romina's high-grade ore. The company expects the additional processing capacity to be ready by February 2027, but has not yet disclosed the specific design capacity after the upgrade is completed.

This week, SMM zinc concentrate inventories at main ports in China totaled 297,000 mt in physical content, up 23,000 mt in physical content WoW, with Lianyungang port inventories contributing the bulk of the growth.