LONDON: A sharp drop in this year’s benchmark smelter treatment charges amounts to a collective re-assessment of the zinc market’s underlying dynamics. Last year’s benchmark terms were set at a 10-year high of $299.75 per tonne amid a broad consensus the zinc raw materials market was heading for a period of significant oversupply, allowing smelters to lift their charges for converting mined concentrate into refined metal.

However, the expected surge in mine production failed to materialise as large supplier countries such as Peru and Mexico were rocked by COVID-19 lockdowns.

As a result this year’s benchmark smelter terms have almost halved to $159 per tonne with smelters forced to accept the changed dynamic.