Zinc concentrate TC continued to decline across various regions in China

In the week ending July 11, zinc concentrate TC continued to decline across various regions in China. The average weekly TC for domestic zinc concentrate dropped by 200 yuan to 1800 yuan/mt. Imported zinc concentrate TC saw a reduction of $5/dmt, reaching an average of $0. In the Inner Mongolia region, the average TC decreased by 100 yuan to 2000 yuan/mt, still one of the highest in the country, while in six other regions, TCs each fell by 200 yuan/mt. This ongoing decline in TC is mainly due to the persistent tight supply of zinc concentrate.

In the week ending July 11 in the spot market, transactions primarily involved domestic ore, as imported ore saw low spot quotations and almost no concluded deals due to extremely low TC levels. Consequently, most smelters have adopted a cautious approach to purchasing. On the supply side, ore grades in northern mines have declined, further impacted by maintenance and regulatory shutdowns, leading to reduced supply. Although the Huoshaoyun lead-zinc mine started operations in July, its impact on short-term ore supply remains limited. On the demand side, despite several smelters undergoing maintenance and halting production this July, raw material procurement continues without significant drops in demand. As a result, the trend of decreasing TCs persists across various regions.

In the week ending July 11, total zinc concentrate inventories at Fangchenggang, Lianyungang, and Jinzhou ports reached 90,000 mt, up 28,400 mt WoW, primarily driven by a surge at Lianyungang. Despite this rise, inventory levels at these ports are still relatively low.