Zinc concentrate price keeps firm in China

BEIJING (Asian Metal) 7 Jun 07 – Zinc ingot market kept dull in recent days, but zinc concentrate prices remained firm, as the demand for the material is still strong and miners have little intention of lowering quotation, market sources reported to Asian Metal.

An official from a Gansu-based zinc smelter reported that although the current zinc ingot market is very sluggish, with zinc ingot price dipping slightly, due to the great pressure from large stockpiles in the Chinese spot market, zinc concentrate price remains stable at RMB22,000/t (USD2,877/t) ex works in the local market.
“In fact, the zinc concentrate supply is not very tight in the local market, but many miners insist on their quotation of RMB22,000/t (USD2,877/t) for zinc concentrate 50%min,” said the source. “If zinc ingot price continues to drop, our profit will shrink further.”

According to the source, the zinc smelter will upgrade its production capacity from the current 20,000tpy to 60,000tpy in June. The source said that as the zinc concentrate supply is limited in the local market, the local government prevents local zinc mines from selling zinc ore or concentrate to other regions, in order to meet the strong demand from local zinc smelters.

A zinc concentrate supplier in Shaanxi said, “Our zinc concentrate 55%min price remains steady at RMB22,500/t (USD2,941/t) ex works, the same level compared with last week.”

The producer said that different from the sluggish zinc ingot market, zinc concentrate market remains active, as smelters have to replenish stocks to maintain operation.

The plant’s zinc concentrate output is about 600tpm, holding few stocks on hand now.

The two sources believe that supported by the high cost of raw materials, zinc ingot price would continue to consolidate at about RMB30,000/t (USD3,922/t) in Chinese market, and the price of zinc concentrate 50%min will remain firm at RMB21,000-22,000/t (USD2,745-2941/t) in Chinese market in the near term.

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