Spot treatment charges for Chinese zinc smelters dipped to $70-$90/mt in November from $80-$90/mt in October, as supply of zinc concentrate tightened globally, Chinese brokerage Ruida Futures, based in Xiamen City, said in its report on the zinc sector Wednesday.
In August and September, TCs were higher at $100-$110/mt and $90-$100/mt, respectively.
Meanwhile, TCs for domestic zinc concentrate in November were in the Yuan 4,200-4,400/mt ($610-$639/mt) range, averaging Yuan 4,300/mt ($625/mt), down Yuan 200/mt from October, the brokerage data showed.
TCs, the fees paid to smelters by miners, for converting zinc concentrate into refined zinc, are a main source of revenue for smelters.
Meanwhile, Jiangxi Copper's subsidiary, Chinese brokerage Jinrui Futures, said in its zinc sector report issued late Tuesday that with the fall in TCs for domestic zinc concentrate, more market players have asked for imported ones, but that due to imported zinc concentrate being in the hands of a few stock owners, TCs for imported concentrate are getting pushed down as well.
Jinrui said as it is now more difficult to source zinc concentrate from the domestic market, some Chinese smelters have begun to import the concentrate and more of it is expected to be imported into China in the next two months.
China's national zinc concentrate import in the first ten months of this year was 1.54 million mt, down 43% year on year, data from the General Administration of Customs showed.
State-run metals consultancy Beijing Antaike said at a zinc sector seminar in Chengdu City in mid-November that Chinese zinc smelters have concentrate stocks just enough for processing for half a month in November, compared with two-month processing stocks in early-2016. The agency forecast domestic zinc concentrate supply to be most tight from the fourth quarter of this year to the first quarter next year, but noted that with high-altitude mines overseas set to resume production by the second quarter of 2017, the tightness in supply of concentrate will ease by then.
In early-November, world's major zinc producer Nyrstar cut its forecast for this year's zinc concentrate output to 90,000-110,000 mt, from the previous forecast of 130,000-160,000 mt. The Belgian producer said spot TCs have continued to dip year to date because of reduced availability of zinc concentrate.
Another international zinc miner, Glencore, also posted a 30% year-on-year drop in its own-sourced zinc output for the first three quarters of this year, at 789,200 mt, according to the miner's third quarter report issued early-November.
