SP Global reported that a wide range of numbers on the 2019 zinc benchmark treatment/refining charge was heard Tuesday between miners and smelters at the International Zinc Association conference in Scottsdale, Arizona, with sources reporting numbers above USD 200 per tonne. A source with a large zinc smelter said parties were reportedly negotiating in a range of USD 215 to USD 250 per tonne. He said he was uncertain, however, whether a benchmark TC/RC deal would be reached at the IZA conference, or whether the meeting would merely provide a forum, as has been the case in recent years, for initial talks, with a deal struck later, in the first or second quarter. TC/RCs are the fees miners pay to smelters to process zinc concentrates into refined metal. Sources have cited factors including an expanding concentrates supply resulting from mine restarts, a buildup of concentrates in China, as well as sharply higher Chinese spot T/RCs as factors giving smelters the edge this year to negotiate a higher fee. The 2018 benchmark TC/RC was reportedly concluded at USD 147per tonne , down from USD 172 per tonne in 2017. On the refined metal side, the supply picture was also evolving, with LME stocks in New Orleans plummeting, but at the same time, new production coming into the market. LME stocks fell 8,925 tonne overnight to 69,475 tonne. An executive with Mexican producer Penoles at the IZA conferee said his company recently expanded its production of refined zinc to 360,000 mt/year, from 240,000 mt/year, or a 50% increase. He said the volumes Penoles ships to the US would increase to 150,000 tonne from a previous 80,000 tonne, noting the company has already begun shipping the added volume. The bulk of the new tonnage sold into the US would go into steel galvanizing. He added that some of the new production is also being sold in Europe.

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