Zinc miners hope to lower annual concentrate treatment charges in 2018
Zinc supply is expected to be tight during the first quarter of this year, prompting differences in price and annual concentrate treatment charges.
There is an ongoing battle between zinc miners and smelters over what are the best annual concentrate treatment charges (TCs) to start this year off as the supply of zinc is expected to experience a shortage in the first half of 2018.
According to Metal Bulletin, the zinc concentrate TCs dipped to $10 per ton in January to a $10-30 per ton level. Negotiations are still ongoing before the annual International Zinc Association conference takes place in California in what could be described by experts as one of the hotly contested in recent years.
China hiked its zinc concentrate imports by as much as 21.8 percent. The miners offered $90 per ton for 2018, which is a far cry from $172 per ton in 2017. On the other hand, smelters countered with over $200 per ton and a base price of $3,200 per ton. A representative from the miner’s side says the offer of smelters is simply outrageous. “It’s ridiculous, the spot market is at $200, when you look at the benchmarks for copper it’s closer to the reality of spot terms,” a part of his statement reads.
Asian zinc premiums remain at $155-$165 per ton on cif Shanghai basis amid fears of limited supply. “Although there will be more zinc concentrates supply this year, mining, smelting and shipment will need a long period of time, so the metal will still be kind of tight,” a trader suggests.
The price of zinc, on the other hand, is expected to reach $3,400 per ton in 2018. Usually, the rally happens in January, just before the Lunar New Year holidays happen. Macquarie analyst Vivienne Lloyd believes zinc supply will pick up in the next months. “Zinc supply is slowly coming back and the greater length of time zinc displays a large price disparity to aluminium the more likely we’ll see substitution,” she added.
The southern Chinese smelters received zinc spot concentrate TCs at as much as 3,600 yuan per ton, but the smelters in the north received zinc spot concentrate TCs at 4,000-4,200 yuan per ton. A smelter from China says the southern smelter had no choice but to bid at the lowest levels just to keep the plants running for at least 15 days. China is a top producer and consumer of zinc, followed by Peru, Australia, U.S. and Mexico.
Last year, Korea Zinc relented to a 15 percent dip in annual processing fees for 2017 because of dwindling supply. Korea Zinc Inc agreed to set the annual treatment charges to $172 per ton with Canada-based zinc miner Teck Resources. South Korea is known as the third-largest zinc smelter in the world.
The TopRanked.io Weekly Digest: What’s Hot in Affiliate Marketing [Week 21]
With car prices predicted to tank, there's an opportunity for affiliates to cash in big. To learn how, all you...
Miwendo Opens Round of €4 Million after Capturing €1.6 Million from Health
In November, Miwendo developed a first clinical study, and will now work on a second, both at the Hospital Clínic...
Coinbase Signs License Agreement to Provide Liquidity and Custody Services with Bitpanda
As Coinbase begins its European expansion, the licensing agreement with Bitpanda serves as a strategic move to capitalize on opportunities...
P&G SGR and UpsideTown Launch Energy Town Fund Dedicated to Renewables
EnergyTown represents an innovation in terms of the target for raising funds on a fintech platform: the first round that...
Cape Verde PM Asks Banks to Change Perception of Financing in Agriculture and Fisheries
POSER was funded at a cost of $36.9M by the Government of Cape Verde, the International Fund for Agricultural Development...
Featured1 week ago
Ripple Launches Institutional CBDC Platform for Millions of Users
Africa2 weeks ago
Reform on Real Estate Development in Burkina: Employees Fear for Their Jobs
Featured5 days ago
Two Spanish Startups Selected by the Amazon Sustainability Accelerator
Crypto2 weeks ago
Is Bitcoin Down Because of Ordinals, BRC-20 Tokens, and Miners?
You must be logged in to post a comment Login