Treatment charges for zinc and lead (TCs) rose in August with the arbitrage to bring material into China switching markedly to a negative value.
TCs for lead concentrates in particular rose sharply, to levels not seen in the past two years. The arbitrage loss to bring refined lead into China hit 1,100-2,300 yuan ($154-321) per tonne at the end of the month, with the futures price rising on the London Metal Exchange.
Fastmarkets’ assessment of terms for lead spot concentrate TC, low silver, cif China, jumped to $75-95 per tonne on August 30 from $30-50 per tonne one month ago.
The corresponding terms for lead spot concentrate TC, high silver, cif China, rose only slightly to $50-80 per tonne from $50-75 per tonne over the same period.
“The arb’ just imploded, and in general there’s a real lack of liquidity among the lead smelters in China. They’re really tight on credit,” a trading source told Fastmarkets on Friday August 30.
The LME cash lead price contract traded as high as $2,111 per tonne on August…
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