SMM Oct 17:
Domestic zinc concentrate TCs continued to decline this week. On a weekly basis, the SMM Zn50 domestic TC average decreased by 100 yuan/mt in metal content WoW to 3,400 yuan/mt in metal content, while the SMM imported zinc concentrate index rose by $0.25/dmt WoW to $118.75/dmt.
In the spot market, losses on imported zinc ore widened WoW, prompting smelters to focus on domestic zinc ore procurement. Trading for imported material remained sluggish, with zinc concentrate TCs staying high. However, as domestic TCs fell, some offers for imported zinc ore saw downward adjustments. If the SHFE/LME price ratio improves, it could pressure imported zinc concentrate TCs, warranting caution for a potential shift. Domestically, traders generally expect further declines in TCs, leading to strong stockpiling sentiment. Smelter production in October is projected to increase slightly from September, driving robust demand for zinc ore. Coupled with continued competition for domestic zinc ore due to economic considerations, TCs in many regions fell further this week, with the downtrend expected to persist next month. Additionally, SMM learned that a zinc mine in North China awarded a tender at 3,850 yuan/mt in metal content (including a 20/80 sharing), down 650 yuan/mt in metal content MoM. SMM will continue to monitor subsequent TC changes.
Zinc concentrate inventories at China's main ports totaled 380,600 mt this week, up 41,300 mt WoW, with Fangchenggang contributing the majority of the increase.
