【Domestic Zinc Concentrate Market】According to SMM, domestic mine supply disruptions have continued recently, while some smelters have resumed production following maintenance shutdowns. SMM expects China's refined zinc production to increase month-on-month in August, resulting in a market characterized by tighter concentrate supply and stronger demand. Meanwhile, the domestic-to-overseas zinc price ratio continued to deteriorate this week, encouraging smelters to actively procure domestic zinc concentrates. As a result, August domestic zinc concentrate treatment charges (TCs) declined further from July levels.

Executive Summary Australia is a major supplier of feedstock to the Asia-Pacific zinc smelting system, but its supply structure is shifting from dominance by a small number of mature mines to a mix of mine closures, volatility at existing operations and ramp-ups at new projects. Glencore's Mount Isa zinc-lead business includes George Fisher and the nearby Lady Loretta mine, which reached the end of its mine life in late 2025. Meanwhile, Dugald River, McArthur River, Rosebery, Century, Cannington and Golden Grove remain the core of zinc concentrate supply from Australia, while newly commissioned or restarted projects such as Federation, Woodlawn and Endeavor have begun contributing incremental output. Zinc mine supply in Australia fell sharply in 2024 due to extreme weather, difficult underground mining conditions and changes in ore sequencing. It recovered in 2025 as McArthur River returned to normal and Dugald River delivered record production. In H1 2026, Glencore's operations in Australia produced 218 kt of zinc in concentrate, down 54 kt year on year, with roughly 51 kt of the reduction attributable to Lady Loretta's closure. Dugald River produced 87.2 kt of zinc in concentrate over the same period, indicating that the overall decline was driven primarily by the exit of a specific mature mine rather than by simultaneous cuts across all core operations. Supply from Australia should therefore be assessed on three horizons. In the short term, the focus is on wet-season disruptions to railways, ports and vessel schedules. Over the medium term, the key issues are the permanent loss of Lady Loretta, Century's approaching tailings-resource limit around 2027 and Cannington's lower operating rates, alongside the ramp-up of Federation, Woodlawn, Endeavor and the Gossan Valley mining front at Golden Grove. Changes in supply from Australia will affect arrivals in China and spot TCs, but the final assessment must also account for global net mine-supply growth and feedstock demand from smelters in China and overseas. I. Zinc Mine Supply in Australia: Mine Closures and New Capacity Ramp-Ups Australia's main zinc mines are located in Queensland, the Northern Territory, Tasmania, New South Wales and Western Australia. Major existing operations include Glencore's Mount Isa zinc-lead business and McArthur River, MMG's Dugald River and Rosebery, Sibanye-Stillwater's Century, South32's Cannington, and 29Metals' Golden Grove. Newly commissioned or restarted projects such as Federation, Woodlawn and Endeavor mean that supply from Australia is no longer determined solely by Mount Isa and Dugald River. The chart shows that Australia's zinc concentrate production has remained relatively high in recent years, although year-to-year volatility has been significant. In 2024, extreme weather at McArthur River and increasingly complex underground mining conditions at Cannington caused a marked decline in supply. McArthur River's recovery and higher production at Dugald River drove a rebound in 2025, before Lady Loretta's closure weighed on output again in 2026. Supply from Australia is therefore not static; it reflects the combined effects of recoveries, declines and additions across individual mines. Performance among existing assets has diverged markedly. Dugald River produced 183.5 kt of zinc in concentrate in 2025, up 12% year on year and a record annual result. MMG's Rosebery produced approximately 48.6 kt over the same period. Century's tailings reprocessing operation produced about 101 kt of payable zinc in concentrate in 2025, although the existing tailings project is approaching a mine-life milestone around 2027. Cannington produced approximately 44.5 kt of payable zinc in FY2025, with guidance of about 40 kt for FY2026 and 43 kt for FY2027, indicating a relatively stable but lower production profile. Lady Loretta's closure has created a confirmed supply loss. Glencore data show that zinc concentrate production in Australia fell 20% year on year in H1 2026, with most of the decline attributable to the mine reaching the end of its life in late 2025. Looking ahead to 2027–2030, supply from Australia will be shaped by offsets between losses and additions. Century faces the gradual depletion of its tailings resource, while Cannington is constrained by more complex underground mining conditions. On the upside, Federation continues to ramp up, Woodlawn has returned to stable production, the Gossan Valley mining front at Golden Grove is expected to deliver first ore in H2 2026, and Endeavor's restart will add supply. Australia's medium-term supply outlook is therefore not a one-way contraction, but rather a period in which retiring mines hand over to new sources of production. II. China's Imports from Australia: Monthly Volatility Does Not Necessarily Signal Mine-Supply Cuts The chart shows that China's imports of zinc concentrate from Australia are highly seasonal and sensitive to shipment schedules. A monthly decline may reflect lower mine output, but it may also result from rail disruptions, delayed port loading, ocean transit times, customs-clearance timing or changes in smelter procurement. A subsequent spike may simply represent delayed cargoes arriving in a later month. Import data should therefore be assessed against at least three sets of information: the gap between miners' production and sales, operating conditions on railways and at ports in northern Australia, and arrival patterns at China's major ports. The low readings in 2024 should not automatically be equated with a lasting production decline. Likewise, the 2026 trend should be assessed primarily on the basis of cumulative imports rather than exaggerated moves in individual months. III. Why Does the Wet Season Affect Zinc Concentrate Exports from Australia? The wet season in northern Australia typically runs from October to April, while the tropical cyclone season lasts from November to April. The 2025–2026 northern wet season was the seventh-wettest on record, with average rainfall of about 684 mm, 44% above the long-term average. Eleven tropical cyclones occurred in the region surrounding Australia during the season. Many zinc mines in Australia are located inland, requiring concentrate to be transported over long distances to port. For example, the Mount Isa mining complex relies on rail links to the Port of Townsville; McArthur River ships through the Bing Bong loading facility; and Century is connected by slurry pipeline to the Port of Karumba. Zinc concentrate from Australia is shipped not only to China but also to South Korea and other overseas smelters. Weather disruptions therefore first affect individual transport corridors before feeding through to the Asia-Pacific spot market. Heavy rainfall and flooding generally affect the market through the following chain: Flooding or cyclones → rail and road disruptions → delayed port loading and vessel schedules → inventory accumulation at mines → delayed and lower arrivals in China In Q1 2026, Dugald River still produced 41.1 kt of zinc concentrate despite flooding and rail disruptions. However, logistics constraints caused concentrate sales to fall short of production, leaving some inventory temporarily stockpiled at the mine. This shows that extreme weather often affects transportation and shipment timing rather than directly impairing mine capacity. Once rail and port operations resume, accumulated concentrate may be shipped in a concentrated wave, allowing China's imports to rebound. Flood impacts are therefore usually temporary and should not automatically be treated as a permanent loss of mine supply from Australia. IV. Why Do Changes in Supply from Australia Affect TCs? Zinc concentrate treatment charges (TCs) are fees paid by miners or concentrate sellers to smelters for processing. They essentially reflect the balance between concentrate supply and smelter demand over a given period. Changes in mine supply and logistics in Australia can alter regional spot-market tightness, but the direction of TCs is not determined by any single country. In general: Ample zinc concentrate supply gives smelters more feedstock options and generally pushes TCs higher; Tight zinc concentrate supply intensifies competition for feedstock and generally pushes TCs lower. Australia is an important source of zinc concentrate for the Asia-Pacific region and the global market. When shipments from Australia are delayed and arrivals in China decline while domestic smelters maintain strong feedstock demand, competition for spot concentrate may intensify and spot TCs may come under short-term pressure. If delayed cargoes subsequently arrive in a concentrated wave, or incremental supply from other regions becomes available in time, the impact may dissipate relatively quickly. At the global mine-supply level, the outlook for 2026 is not a one-way contraction. Kipushi in the Democratic Republic of the Congo produced 70.2 kt of contained zinc in concentrate in Q2, marking a seventh consecutive quarter-on-quarter increase. In Australia, Woodlawn returned to stable production, Federation continued to ramp up and Endeavor's restart added new supply. These gains are being offset by the closure of Lady Loretta, Antamina's shift to a copper-rich, zinc-poor ore sequence, feedstock-blending constraints at Kazzinc and the potential depletion of Century's tailings resource around 2027. Global mine supply is therefore increasingly characterised by simultaneous growth at new mines and declines at mature assets. TC assessments should therefore focus on whether annual net additions are sufficient to offset losses, as well as changes in smelter operating rates in China and overseas. In the short term, the key variables are rail and port conditions in Australia and arrivals in China. Over the medium term, additions from Kipushi, Woodlawn and Federation should be weighed against reductions at Lady Loretta, Antamina and Century. Only by assessing the global mine balance alongside smelter demand can the market determine whether pressure on TCs is temporary or structural. Conclusion Australia's zinc mine supply is moving through a handover between mature and emerging assets. Lady Loretta's closure represents a confirmed loss, while established operations such as Mount Isa's zinc-lead business and McArthur River are expected to focus on stable production. Dugald River remains resilient, and Rosebery, Century, Cannington and Golden Grove continue to underpin existing supply. Meanwhile, newly commissioned and restarted projects are beginning to add incremental tonnes. In the short term, the wet season and flooding mainly affect the timing of China's imports through disruptions to railways, ports and vessel schedules, rather than causing permanent capacity losses. Over the medium term, supply from Australia in 2027–2030 will depend on the balance between potential declines—such as the depletion of Century's resource and Cannington's lower operating rates—and growth from the ramp-up of Federation, Woodlawn, Endeavor and the Gossan Valley mining front at Golden Grove. For TCs, fluctuations in supply from Australia can affect the Asia-Pacific spot market but cannot by themselves determine the long-term global zinc concentrate balance. The market should track mine production and sales in Australia, logistics in northern Australia, China's cumulative imports, developments at overseas mines such as Kipushi, Antamina and Kazzinc, and smelter operating rates in China and overseas. Only if global net mine-supply growth remains insufficient while smelter demand stays high will supply losses in Australia translate into sustained downward pressure on TCs.

【Imported Zinc Concentrate Market】The import arbitrage for zinc concentrate has deteriorated further amid a widening gap between domestic and overseas zinc prices, reducing the economic attractiveness of imported material. Smelters continue to prioritize domestic concentrate procurement. Spot trading activity for imported zinc concentrate remained relatively limited this week, while treatment charges (TCs) continued to hover at low levels.

【Zinc Concentrate Tender】According to SMM, a zinc mine in Southwest China recently concluded its August zinc concentrate ex-works tender at approximately RMB -1,600/metal tonne, down by around RMB 800/metal tonne from the previous month. SMM will continue to monitor subsequent changes in zinc concentrate treatment charges.

As of July 28, LME zinc inventories (including off-warrant stocks) had fallen to 119,600 mt, down by approximately 45,000 mt from mid-June. As overseas inventories continued to decline, the LME zinc market structure shifted from contango to backwardation, with the backwardation widening further. By July 28, the LME zinc cash-to-3M spread had strengthened to US$61.09/mt.

According to China Customs data, China imported 2.7616 million tonnes (gross weight) of zinc concentrate during January–June 2026, up 8.98% year on year, with overall imports posting modest growth compared with the same period last year.

【Domestic Zinc Concentrate Market】As month-end approaches, Chinese smelters and mines have started preliminary negotiations on August zinc concentrate treatment charges (TCs). Final agreements across most regions are expected to be concluded next week, with the market awaiting the official August TC settlements.

According to the latest China Customs data, China imported 362.8 kt (gross weight) of zinc concentrate in June 2026, down 8.51% MoM (or 51.1 kt) but up 9.97% YoY. Cumulative imports for January–June 2026 reached 2.7616 million tonnes (gross weight), representing a 8.98% increase from the same period last year.

Zimbabwe has recently continued to advance its domestic lithium-processing policy while simultaneously improving the logistics infrastructure used for lithium concentrate exports. At first glance, the construction of new railway transport links appears inconsistent with the proposed restrictions on concentrate exports. In practice, however, the two policies correspond to different stages of industrial development. Railway investment is intended to support current mine operations, export earnings and logistics cost reductions, while export restrictions are designed to encourage the extension of the domestic value chain into intermediate products such as lithium sulphate. The principal objective is therefore not to halt lithium exports immediately, but to use export permits and policy deadlines to retain a greater share of processing investment and capital expenditure within Zimbabwe. From a policy perspective, the restrictions are better understood as an industrial investment requirement than as a conventional trade ban. Zimbabwe remains dependent on mineral exports for foreign-exchange earnings, tax revenue and employment. A complete suspension of concentrate exports before sufficient domestic processing capacity has been established would therefore conflict with the country’s near-term economic interests. A more probable policy path would be to link export quotas to the construction progress of processing facilities, local investment commitments and the operating status of individual projects. Under this framework, export access would effectively be exchanged for additional domestic investment. The main constraint on implementation is that Zimbabwe’s existing processing capacity is largely captive capacity built to serve individual mining projects. The country has not yet developed a market-based processing system capable of handling concentrate from multiple third-party suppliers. Concentrates from different mines vary in lithium grade, impurity content, particle size and metallurgical characteristics. Third-party processing therefore requires not only technical adaptation, but also commercial arrangements covering recovery rates, treatment charges, material losses and product-quality responsibilities. As a result, nominal processing capacity should not be treated as equivalent to effective capacity available to the broader industry. The existence of several lithium sulphate plants does not necessarily provide a viable conversion route for mines without their own processing facilities. This constraint is likely to reshape the competitive structure of Zimbabwe’s lithium industry. Project value will increasingly depend not only on resource size, grade and mining costs, but also on access to processing capacity, export permits, logistics infrastructure and end-market channels. Vertically integrated companies controlling mines, concentrators, conversion plants and customer relationships in China will be better positioned to comply with the policy and monetise their resources. Smaller mines without processing facilities may become increasingly dependent on toll treatment, offtake agreements, equity partnerships or asset sales. The export restrictions could therefore raise the domestic processing ratio while also accelerating the concentration of lithium resources in the hands of a limited number of integrated operators. For the Chinese lithium supply chain, the policy does not imply that Zimbabwean lithium resources will permanently disappear from the market. Rather, the form in which those resources enter China and the channels through which they are traded are likely to change. Part of the current concentrate supply may eventually be exported as lithium sulphate or other intermediate products. At the same time, supply may shift from a relatively fragmented network of miners and traders towards a smaller number of integrated producers. This would reduce the volume of African concentrate directly available to independent Chinese lithium refiners and increase the share of material moving through long-term offtake agreements or internal corporate supply chains. The principal market impact may therefore be reflected less in a substantial reduction in annual resource supply and more in changes to supply timing and spot-market liquidity. During the transition, export-quota adjustments, delays to processing projects and changes in product form could create volatility in mine inventories, export volumes and Chinese arrivals. When downstream inventories are low or freely tradable concentrate is limited, such disruptions can be amplified and translated into a higher short-term risk premium for both spodumene concentrate and lithium carbonate. The expansion of railway infrastructure is not inherently inconsistent with the domestic-processing policy. Railways can support current concentrate exports, but they can also transport lithium sulphate, processing equipment and chemical inputs in the future. The more important issue is that the pace of policy implementation may exceed the development of processing capacity, electricity supply, chemical inputs and commercial infrastructure. If the restrictions are implemented too rapidly, they may result in production cuts, inventory accumulation and project delays. A sufficiently long transition period would allow processing capacity to develop gradually while limiting disruption to existing exports and employment. Overall, Zimbabwe is more likely to adopt an approach based on formal restrictions, transitional quotas and investment-linked exemptions , rather than impose a complete and immediate halt to all concentrate exports. The long-term effect of the policy will not be to reduce the country’s underlying lithium resource base, but to redistribute processing margins and control across the value chain. The companies best positioned to benefit will not simply be those that own lithium resources, but those able to integrate mining, processing, logistics, export access and downstream customer relationships.

【Domestic Zinc Concentrate Market】According to SMM, sulfuric acid prices across many regions in China have recently remained elevated at RMB 1,500–1,900/mt, continuing to provide strong profit support for domestic zinc smelters. The domestic zinc concentrate market remained tight in July, while the domestic-to-import price ratio stayed unfavorable, prompting smelters to continue prioritizing purchases of domestic zinc concentrate. Mainstream domestic treatment charges (TCs) have now declined to -500 to -1,000 yuan/metal tonne.