Spot treatment charges for imported zinc concentrates for Chinese zinc smelters stood at $40-$50/mt in May, up $20/mt from $20-$30/mt in April, as domestic concentrate supply slightly improved, with mines in Northwest China, a key domestic zinc mining base, turned more active in production with the warmer weather in this quarter, industry sources in China said on Thursday.
"For the mainstream 50% imported zinc concentrate, deals were inked at $40-$50/mt this month, better than $20-$30/mt last month," a concentrate dealer in Northwest China said.
Although a report by key Chinese zinc producer Jiangxi Copper said that a limited number of overeas mines' spot TC offers were as high as $60/mt this month, the dealer said these fees refer to concentrates with more impurities.
TC, the fee paid to smelters by miners for converting concentrate into refined zinc, is a key source of revenue for smelters.
"Back in the first quarter of this year, the cold winter in the autonomous regions of Xinjiang, Inner Mongolia, Tibet and Qinghai province in China, as well as Outer Mongolia, caused mines there to shut or cut output, resulting in very tight concentrate supply at that time," the dealer said.
"But mines in the those production zones gradually resumed running since the second quarter, slightly easing the spot tightness now," he said.
China imported 211,000 mt of zinc concentrate in April, up 44% year on year, while its zinc concentrate imports in the first four months rose 16% year on year to 913,000 mt, with Australia, Peru, Eritrea, and Russia the top import nations, data from the General Administration of Customs showed.
China is forecast to have zinc concentrate demand of 5.43 million mt in 2017, 368,000 mt more than 2016's demand, data from state-run metals consultancy Beijing Antaike showed.
The country's net zinc concentrate import forecast is 900,000 mt for 2017, 50,000 mt less 2016's net import of 900,000 mt, the agency data showed.
Mined zinc output for 2017 is forecast at 4.1 million mt, up 200,000 mt from 2016's output, Antaike data showed.
Due to the anticipated growth in domestic concentrate output, Antaike has forecast China's mined zinc market to turn to a surplus of 70,000 mt in 2017, compared with a zinc concentrate deficit of 448,000 mt in 2016.
