HONG KONG: Some large refined zinc producers in China plan to regularly exchange information on their imports of concentrate to ensure they receive reasonable treatment charges, sources at two smelters said on Thursday.
They plan to form a body similar to copper smelter group the China Smelters Purchase Team (CSPT), whose members often share information on their concentrate imports and metal production.
Sellers of zinc or copper concentrate pay treatment charges, which are deducted from the prices that buyers pay for concentrate.
"We expect strong demand for (concentrate) imports in the future as domestic supply is not sufficient," one of the sources said when asked why the group would be formed. He declined to be identified as he was not authorised to speak to media.
Chinese producers of refined zinc, used in everything from vehicles to electronics, have been hit by faltering appetite for the metal as the world's No.2 economy slows.
At a November meeting, 10 producers proposed to cut production by 500,000 tonnes in 2016, trying to boost prices that were languishing at six-year lows. They included Zhuzhou Smelter Group Co Ltd, Huludao Nonferrous Metal Group Co Ltd and Shenzhen Zhongjin Lingnan Nonfemet Company Ltd.
Those 10 producers accounted for about half China's zinc concentrate imports in 2015, said a trader at an international trading firm.
"We have no doubt Chinese zinc smelters will set up the group. We will have to wait and see how it works," the trader said.
China's zinc ore and concentrate imports surged 60 percent to 3 million tonnes in the first 11 months of 2015, customs data showed.
Traders said strong imports from China had cut supplies in the global market, prompting sellers to trim spot TCs.
Spot standard zinc concentrate had been offered to China at TCs of about $120-$130 a tonne this month, down from about $150 in late December and $170-$180 in November, traders said.
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