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Spot zinc concentrate treatment charges (TCs) remained deep in negative territory in late June and early July, with buyers competing to secure units as tight raw material supply persisted worldwide, market participants told Fastmarkets.
Fastmarkets’ most recent twice-monthly assessment of the zinc spot concentrate TC, cif China, was $(70)-(120) per tonne on Friday June 26, down from $(50)-(80) per tonne on June 12.
Negative TCs mean smelters effectively pay miners to secure concentrate, the inverse of the market’s normal structure, squeezing processor margins as competition for feed intensifies. Sources said the tightness extended beyond China, with one trader noting that Korean smelters were also short of raw material.
Canadian miner Ivanhoe Mines said its Kipushi mine in the Democratic Republic of Congo produced a record 70,177 tonnes of zinc-in-concentrate in the second quarter of 2026, up by 8% quarter on quarter, according to a July 8 production update.
The company said the result marked a seventh consecutive quarterly increase and was equivalent to annualized output of approximately 280,000 tonnes, boosted by record ore milled of 200,774 tonnes, a record feed grade of 38.7% zinc and record concentrator recovery of 92%. Ivanhoe said production was tracking toward the upper end of its 2026 guidance of 240,000-290,000 tonnes.
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Indian multinational miner Vedanta Ltd said production from the second phase of its Gamsberg operation in South Africa was scheduled to begin in July, according to its July 3 production release for the first quarter of its 2027 fiscal year (the three months ended June 30, 2026).
Gamsberg phase 1 mined-metal output rose by 10% quarter on quarter to 45,000 tonnes, the company said, while total Zinc International mined metal fell by 14% year on year to 48,000 tonnes as its Deeps mine Black Mountain operation neared the end of its life.
Separately, an ongoing Gamsberg tender was heard for around 40,000 tonnes, with shipments scheduled between the third quarter of 2026 and the second quarter of 2027, sources told Fastmarkets. Market participants said tenders for the material were priced on a discount-to-index basis.
Market sources said that Gamsberg’s low-silver content makes it relatively difficult to sell into China at strong numbers.
Canada-based, China-focused miner Silvercorp Metals said it would temporarily slow operations at its Ying and GC mining operations in China to comply with new nationwide mine-safety measures, according to a June 29 statement.
The company, which produces silver, gold, lead and zinc, said the measures followed a fatal coal-mine accident in late May that prompted regulators to extend safety inspections across metal and non-metal mines. Silvercorp said output at its Ying district was expected to be reduced by 40-50% during the July-September quarter and at GC by approximately 50%, with current-quarter production affected by 10-15%.
Separately, sources said some Chinese smelters had trimmed run rates by around 5-10% in response to extremely low TCs, characterizing the reductions as care and maintenance rather than widespread production cuts.
Bolivian export flows have been disrupted for around six weeks, with material struggling to reach port amid roughly 50 blockades, a North America-based trader told Fastmarkets in mid-June.
“There’s Bolivia, the Iran war still going on, Australia still [in] disruption, no new mines — a lack of supply,” the trader said, adding: “What’s scary is when something opens, it’s going to [swing] back into positive [territory] aggressively.”
In Peru, the government declared a 60-day state of emergency across 22 regions on July 3 over the risk of El Niño-linked rains, according to a decree published in its official gazette. The measure was precautionary and no output losses had been reported.
A trader in Europe said flows from Iran to China had not been materially affected to date but would tighten the market further if interrupted, since that material can only move to China.
A run of mid-year tenders have been concluded at deeply negative TCs, sources said, though the levels heard varied widely. Awards cited included Volcan (around 100,000 tonnes in total from October), Dugald River (around 10,000 tonnes for August shipment) and Raura, alongside the Gamsberg and Bisha tenders.
One market source in Asia said Bisha’s tender was heard at a lower TC on account of high copper content in the material.
On the divide between the two sides, smelters were said to be seeking to buy nearer $(80) per tonne but unable to win material at those levels, with traders selling wider.
“You cannot buy at minus $150 [per tonne] and sell at minus $80 and expect to make money,” a second trader in Europe said.
A fire broke out at Young Poong’s Seokpo smelter – the sixth-largest refined zinc producer – in South Korea on July 9, prompting fire authorities to issue a level 1 emergency response, according to local media reports. Authorities believed the blaze had started near the smelter’s sulfuric acid plant, the reports said.
The effect on the smelter’s operations and on its sulfuric acid output could not immediately be determined. The rough zinc production capacity of the Seokpo smelter is reported to be between 325,000 and 400,000 tonnes per year.
Market sources told Fastmarkets that Chinese smelters had turned cautious after a US-Iran peace deal raised expectations that sulfuric acid prices and treatment charges might ease, before a renewed escalation this week reintroduced uncertainty.
The first European trader source said Chinese buyers were reluctant to commit at sharply negative TCs while waiting to see how the situation developed.
Copper content in some concentrates was also supporting effective TCs, sources said, with smelters paid for contained copper. One source said a recent Antamina zinc tender had, for the first time, involved a copper payable but was ultimately concluded without one, at a deeply negative TC instead; the copper grade was not known.
“Why is China still producing? If [a smelter] still makes money, it won’t stop — because if I stop, my competitor makes more money than I do,” the first European trader said.
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