Zinc Smelters to Get 35% Higher Treatment Charge for 2008

Major zinc smelters’ treatment charge for 2008 shipment is likely to increase by 35% from previous year at ongoing negotiation with major miners. They will agree to keep the price participation system, in which they share the profit and loss from change of ingot market price. The smelters will win the price negotiation when the ore supply gets easier with new mining activity. The treatment charge is likely to settle at US$ 300 per tonne based on US$ 2,000 per tonne of zinc ingot price for 2008 shipment. The treatment charge was US$ 300 of treatment charge based on US$ 3,500 of zinc ingot, which represents around US$ 220 based on US$ 2,000 of zinc ingot. International Lead Zinc Study Group expects zinc market is more than 200,000 tonnes of oversupply in 2008 after the short supply in 2004-2007. Under the oversupply condition, the smelters get higher charge after they accepted around 30% lower charge for 2007 shipment. The charge was the lowest level of US$ 128 per tonne based on US$ 1,400 per tonne of zinc ingot for 2006.