It is absolutely not surprising that zinc smelting treatment charges are destined to be the highest this year as compared to last 12 years. According to the surveys and data collected by Fastmarkets, it is pretty clear that there is going to be huge surplus of mined zinc and this is going to make the ground for the smelting companies to charge more for the task of converting the raw metal into refined metal. The chilling of zinc supply chain has been a determining factor for all the happenings in the industry and there is a sense that the current year’s benchmark is indicating a definite looking-back pattern.
Fastmarkets reports that the benchmark deal between Canadian miner Teck Resources and Korea Zinc (from South Korea) has been set at its highest as compared to the last high-price deals (that happened in 2008).
Owing to the scenario faced by the entire world due to the Pandemic and post-pandemic situation, it is expected that there will be severe changes in all industries. Zinc mining and smelting too is not out of the consequences. With the government order of complete lockdown in India and many other countries, the mines had to either close down the operations completely or stayed afloat with minimal workforce. Now there are companies who kept working and that has resulted in a cumulative side-shock.
The new world after the pandemic is expected to experience concentrate shortfalls and finally leading to affect the rates charged by smelters. Actually, the analysts and every other concerned person related to the zinc market (all other base metals as well) are uncertain about what to expect and what not to expect as all the financial or demand-supply balance they had worked out for this year has been thrown into the waste-basket – credit Corona virus! However, it is also the time that can bring good news for the zinc industry as it is expected that zinc is going to be the medium-term buy with the acceleration of the normal commodity boom-bust cycle. It is high time for the evolution of the zinc supply chain.