First zinc agreements reached

摘要

Negotiations of terms for this year's annual zinc concentrate supply contracts have made considerable progress since January's Monitor. In Asia, Korea Zinc has agreed terms for some of its business although we are not aware of any Australian zinc miners having settled with it. It is not clear if the Japanese Smelting Pool (JSP) has agreed terms too. It is no surprise that Australian miners are no longer playing a leading role in negotiations. Xstrata is a significant net smelter because of its European zinc smelting business and Zinifex is a modest net smelter since the old Pasminco sold or closed some mining units. Meanwhile, a number of new Australian miners are relatively small and have shareholders with zinc smelting interests. Progress has also been made in Europe. Some European zinc smelters have concluded a significant proportion of their business, deals having been struck with some European zinc miners as well as with Teck Cominco. However, there are other European smelters that have not concluded any business yet. Some zinc companies, after all, are less exposed to changes in terms than others. Boliden has had a balance between its mining and smelting production since the merger of the old Boliden's mining and Outokumpu's smelting assets (as it points out in its interim report released today). It is not clear what progress Noranda has made with its traditional customers in Europe. As Balmat remains a little elusive, it is not clear how much zinc concentrate Noranda will have available to sell in Europe, Moreover, the possibility of the new HudBay treating Balmat's concentrate internally cannot be ruled out.