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Spot zinc TC for China rise to USD 20 to USD 30 million tonne

Metal News - Published on Wed, 23 May 2018

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Platts reported that spot treatment charges for imported zinc concentrates for Chinese smelters in the third week of May rose to USD 20-USD 30 million ton, from USD 15-25 million tonnr in the preceding week, as the warmer climate in China spurred the restart of domestic mines, raising concentrate supply.

Back in January, TCs averaged just USD 10 million ton as the snowy winter at that time in the key Chinese zinc mining zones in the autonomous regions of Tibet, Inner Mongolia and Xinjiang has halted mining there, so cut domestic mined zinc supply, cutting TCs, Chinese trade sources said.

Zinc producer Jiangxi Copper Corp in its weekly zinc report said with the warmer domestic climate, mines in West China, and North China gradually resumed production, so easing the tightness in domestic concentrate supply.

The producer said in Inner Mongolia, miners had hiked domestic zinc TCs by Yuan 100 (USD 15.67) in the third week of May, with concentrate deals done at fees of around Yuan 3,200-3,800 million ton.

Guangzhou based Chinese brokerage Huatai Futures in its mid-May zinc report said with the zinc mines in China gradually resuming production in the second half of this year, Chinese smelters' concentrate stocks should rise, so spot fees should stabilize, and climb in the coming months.

TCs, the fees paid by mines to smelters, for converting the concentrates into zinc ingot, are a key revenue source for smelters.

State run metals consultancy Beijing Antaike predicted global mined zinc output in 2018 to be restored to the pre-output-cut level (output before 2016), with the world's concentrate supply and demand seen just in balance by 2020, so deemed it hard for international TCs to rise much this year.

The agency said due to falling ore grades of both domestic and imported zinc concentrate, with China's imported concentrate volume last year just offsetting its output cut and not creating a major concentrate stocks in China.

China is forecast to consume 5.798 million mt of mined zinc in 2018, up from an estimated 5.638 million tonnes in 2017, data from Antaike showed.

China's national mined zinc output in 2018 is expected to be 4.45 million mt, up from estimated output of 4.3 million in 2017, its data showed.

China is seen having a mined zinc deficit of 48,000 million tonnes this year, narrowing from 88,000 mt with net zinc concentrate imports this year seen at 1.3 million tonnes, edging up from 1.25 million tonnes last year, Antaike data showed.

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Posted By : Rabi Wangkhem on Wed, 23 May 2018
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