China's Antaike says 2013 term zinc TCs to rise 7% on year to $205/mt
Hong Kong (Platts)--4Feb2013/539 am EST/1039 GMT
Term zinc concentrate treatment charges are expected to rise to $205/mt
in 2013, up 7% from last year, state-owned metals consultancy Beijing Antaike
said late Friday, citing an expected hike in global supply.
In April last year, Belgium-based zinc producer Nyrstar said the
majority of zinc TCs for 2012 were settled in line with a base TC of $191/dry
mt at a basis zinc price of $2,000/mt with escalators of 5 cents per $1
increase in price above that, 4 cents per $1 increase above $2,500/mt, 2
cents per $1 increase above $3,000/mt and flat above $3,500/mt. A
de-escalator of 2 cents per $1 decrease in the zinc price below $2,000/mt was
included with the TC was to remain flat if the zinc price was below $1,500/mt.
TCs, the fees paid to smelters by mines for converting the concentrate
into refined zinc, are a key source of revenue for smelters.
"We see 2013 term TCs to be $205/mt, LME zinc price basis $2,000/mt,
escalator of 5%, and de-escalator of 2%," Antaike zinc analyst Guo Chunqiao
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He pointed out that UK-listed Vedanta inked in November term contracts
for 2013 with European traders at TCs slightly higher than $160/mt. "We see
this to have limited guiding impact as back in the LME week held last year,
industry experts generally forecast 2013 benchmark TCs to rise due to
improving zinc concentrate supply," he said.
Western analysts echoed Antaike's views with The Macquarie Group saying
in a research statement published in December last year that term zinc TCs
could reach $210/mt in 2013, zinc price basis $2,000/mt.
Meanwhile, Antaike forecast spot TCs for imported concentrate paid to
Chinese smelters by mines this year at $110-185/mt, up from $45-130/mt last
year, citing abundant domestic concentrate supply, which will mean a cut in
In October last year, the International Lead and Zinc Study Group, an
intergovernmental organization set up by the UN, said that global zinc mine
output was expected to rise 5% in 2012 to 13.6 million mt, increasing a
further 2.7% in 2013 to 13.96 million mt.
China's national zinc concentrate output in 2012 hit 5.134 million mt,
up 13% from 2011, according to National Statistics Bureau data.
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