Benchmark zinc treatment/refining charges for 2016 were being negotiated in a range of roughly $180-$190/mt with a basis price of $1,600, sources said this week.
However, one analyst at the International Zinc Association conference in Scottsdale, Arizona, said he doubted that any major zinc players on the mining or smelting side would conclude a TC/RC deal at this week's meeting. The conference concludes Wednesday.
The 2015 benchmark settled at $245/mt, basis $2,000/mt. A trader at conference said he believed the 2016 negotiations were focused on a TC/RC at $190, with a basis price of $ 1,700/mt.
The analyst said the sticking point in this year's talks has been "price participation," or the TC/RC's built-in escalators and de-escalators that adjust the fee based on fluctuations in the LME zinc price during the year. LME three-month zinc was trading at about $1,730/mt Wednesday.
All told, the 2016 TC/RC benchmark is likely to settle at about a $40 decrease year on year, taking into account both the fee itself and the basis price differential, sources said.
Going into this year's negotiations, sources said current zinc-market fundamentals favored the miners, given the looming concentrates supply shortfall resulting from large mine closures and producer cutback plans.
Miners have also argued that they need a discounted TC/RC this year as low zinc prices have squeezed their bottom line.
But some sources at the IZA conference noted that miners operating in countries with weak currencies are seeing lower operating costs, which they say offsets the miners' price-related losses.
