Market and product

Spot treatment charges for imported zinc concentrate paid to Chinese smelters fell to $80-$90/mt in October, from $90-$100/mt in September, industry sources said Tuesday.

August TCs were even higher at $100-$110/mt.

"This month, [Chinese smelters] have been seeking TCs of $80-$90/mt, with some [imported zinc concentrate] deals done at $70-$80/mt," a northwest China zinc concentrate dealer said.

"The $80/mt deals were for zinc concentrate with higher impurities, while the $70/mt deals were for cleaner concentrate," he said.

The northwest China trader attributed the falling TCs to the approaching winter season, which tightens the country's zinc concentrate supply.

"In the [autonomous regions of] Tibet, Inner Mongolia and Xinjiang, zinc mining is expected to be disrupted during winter, trimming mined zinc supply," he said.

TCs, the fees paid to smelters by mines for converting concentrate into refined zinc, are a main source of revenue for smelters.

China imported a total of 1.26 million mt of zinc concentrate in the first eight months of this year, 37% less than the same period a year ago, General Administration of Customs data showed. The decline was attributed to nosediving import volumes from Australia and Peru -- China's largest sources for mined zinc.

Chinese brokerage Huatai Futures, based in Guangzhou city, in its zinc sector report issued Tuesday said TC offers for imported zinc concentrate turned chaotic this week, ranging from as low as $50-$60/mt to $80/mt. It noted that following the National Day holidays in early October, Chinese zinc smelters were competing for imported zinc concentrate, as they need to store material ahead of winter.

The brokerage said losses derived from imported zinc concentrate trade hovered around Yuan 1,000/mt ($150/mt) in October, about Yuan 200-500/mt less than September levels. It forecast that spot zinc TCs would dip further for the remainder of this year, due to growing domestic demand for concentrate for storing ahead of winter. - Platts