Spot zinc TCs for Chinese smelters slump

Spot zinc TCs for Chinese smelters slump to $100-$110/mt in Aug

in Commodity News 23/08/2016

Spot treatment charges for imported zinc concentrate for Chinese smelters have slumped to $100-$110/mt in August due to a global fall in mined zinc output, Beijing-based brokerage Galaxy Futures said Monday.
This is down from around $130/mt in the second quarter and $140-$160/mt in Q1, Galaxy Futures said in a commodity report.
The brokerage said zinc concentrate stock levels at most domestic smelters were low currently at less than one month’s supply.
It attributed the falling TCs to demand for zinc concentrate exceeding supply and to the high volume of zinc concentrate inventories consumed in China in the first half of the year.
China’s zinc concentrate deficit in 2016 is forecast to widen to 391,000 mt from a deficit of 9,000 mt a year ago, state-owned Chinese metals consultancy Beijing Antaike said its zinc sector report at end June.
It forecast China to have a net zinc concentrate import volume of 900,000 mt this year, down from 1.496 million mt last year.
Belgian zinc miner Nyrstar produced just 65,000 mt zinc in concentrate in H1, down 39% year on year, the producer said in its interim report on August 8. It forecast its zinc in concentrate output at 55,000-85,000 mt in 2016, down from 106,000 mt a year earlier.
Zinc concentrate output at Rosebery mine in Australia’s island state of Tasmania fell 11% year on year to 58,137 mt in H1 due to lower head feed grades, mine owner MMG said in its interim report.
Mining at Century, Australia’s largest open-pit zinc mine, ended in August 2015 after 16 years, according to MMG.
Meanwhile, the front month zinc futures closed at Yuan 17,365/mt ($2,610/mt) on Shanghai Futures Exchange Monday, up from Yuan 17,105/mt last Monday.
Weekly deliverable zinc stocks stood at 194,144 mt in the four SHFE warehouse locations Friday, down 1.6% week on week and on warrant inventories slipped 2.3% week on week to 121,120 mt. Deliverable stocks are the amount of metal available in the warehouse. On warrant stocks are the amount of metal which are good for delivery.
The four locations are Shanghai, Guangdong, Jiangsu and Zhejiang.
On Friday, the London Metal Exchange official cash price for zinc was $2,286.50-$2,287/mt Friday, up from $2,237-2,238/mt for August 12.
Source: Platts