Spot treatment charges for imported zinc concentrates for Chinese zinc smelters were $55-60/mt in July, up from $45-55/mt in June, due to higher supply, though it is not as high as two years ago, industry sources in China said Thursday.
In May, TCs, the fee paid to smelters by miners, were $40-50/mt, while in April they were even lower at $20-30/mt.
"Last month, there were a lot of inquiries from Chinese smelters for imported concentrates, but trade was very thin, with overseas mines offering TCs of just around $50/mt," a concentrates dealer in Northwest China said.
But as the spread between prices on the London Metal Exchange and Shanghai Futures Exchange widened this month, some deals for imported concentrates were inked at $55-60/mt in the past few weeks, he said.
Meanwhile, although spot TCs were reported as high as $70/mt this month, a Shaanxi-based trader close to the smelters said this referred to zinc concentrates which has more impurities such as lead. Mainstream imported 50% concentrates deals were reported at $55/mt this month.
Demand for refined zinc in the domestic downstream processing sector was supporting smelters' demand for imported concentrates, the dealer said.
Due to a fall in concentrates supply from Australia this year, Chinese smelters turned to supplies from Peru.
Chinese zinc producer Tongling Nonferrous Metals said in its July report that despite growing global demand, environmental checks and mining reforms limited the supply of concentrates.
The heavy rain in South China this month also affected mining operations and delivery, zinc producer Jiangxi Copper said in its July report.
China's imports of zinc concentrates over January-May hit 1.13 million mt, up 25% year on year, data from the General Administration of Customs showed.
Peru, Australia and Russia were China's top three buyers of zinc concentrates with 304,018 mt (up 40% year on year), 29,0751 mt (down 8% year on year) and 92,486 mt (more than 200%), respectively, the data showed.
State-owned metals consultancy Beijing Antaike has forecast China's zinc concentrates demand in 2017 at 5.63 million mt, stable from last year.
It estimated China's imports of zinc concentrates at 1.1 million mt this year, up 100,000 mt from 2016, and domestic output at 4.7 million mt, up 300,000 mt from last year.
China was likely to have a zinc concentrates surplus of 170,000 mt this year, against a deficit of 238,000 mt last year, Antaike added.
