[SMM analysis] the supply of domestic zinc concentrate is tight and the processing cost of zinc concentrate is lower than that of the previous month.

SMM9 March 21: according to SMM research, since August 28, the domestic zinc concentrate TC showed an overall downward trend. As of September 18, the domestic zinc concentrate TC is 5300 yuan / metal ton, which is 250 yuan / ton lower than August 28.

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SMM believes that the main reasons for the decrease of TC of domestic zinc concentrate are:

On the one hand, according to SMM research, the output of zinc concentrate in August was 280300 tons, down 3.1% from the previous month and 22.1% from the same period last year. Due to the great impact of the epidemic in the early stage, the mine end recovered less than expected from the same period last year. Since August, the TC of imported ore has been declining, which to some extent reflects that the supply of imported ore is tight, and the balance of domestic ore needs to be adjusted by import, and the decrease in import leads to an increase in demand for domestic zinc concentrate, so the supply of domestic zinc concentrate is tight.

On the other hand, although the processing fees for domestic zinc concentrates have been lowered from the previous month, the processing fees are still at a high level, which is still up 300 yuan per metal ton compared with the lowest 5000 yuan per metal ton this year. The superimposed zinc price generally shows an upward trend, and the profits of smelters are OK. The production enthusiasm has increased, mainly by resuming production and increasing production. The output of refined zinc continues to climb, and it is expected that the output of refined zinc will increase by 36900 tons to 545900 tons in September. And recently, some smelters are worried that the ore supply is tight in the fourth quarter, the winter storage time is ahead of schedule, and there is more demand from short-term smelters, which to a certain extent leads to the tight supply of zinc concentrate and the reduction of processing fees.

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