Zinc miners in North America are hoping for a short-lived affair in this year's mating season, during which treatment charges (TCs) are decided with major smelters in Europe and Asia for the following year. Negotiations on TCs have had a tendency to be drawn out in recent years, sometimes lasting up to six months. This time, though, miners claim the case for a significant drop in TCs is so strong that they key deals could be tied up within a couple of months. Serious negotiations are now under way, and all signs point to prevailing spot rates of around 130 dollars per tonne, basis a London Metal Exchange price of 1,000 dollars per tonne, being reflected in the long-term agreements. TCs were settled in 2002 at around 168 dollars per tonne, basis 1,000 dollars per tonne LME, but a drop of about 40 dollars is seen as likely given the considerable tightness in the zinc concentrates market. When there are less concentrates to be treated, or an excess in smelting, capacity, smelters have to drop their charges to win the miners' business. While the zinc industry has witnessed a number of mine closures during the past year, the smelters have been reluctant to reduce output.
NSTL
