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Gold/Mining/Energy : ZINC The base metal. News and Views. Symbol Zn -- Ignore unavailable to you. Want to Upgrade?

To: ForYourEyesOnly who wrote (185)	5/5/1999 8:25:00 PM
From: Stephen O	Respond to of 3270

May 5 (Metal Bulletin) - The tender for 35,000 tonnes of zinc concentrates from Cominco's Red Dog and Polaris closed on May 4, and was described by company sources as "oversubscribed and very competitive, with most of the bids coming for treatment charges (TCs) in the high $150s and low $160s". The company said that it was also going to award the tender, for supplies over delivery over the next two years out of Antwerp, on the same day. The Canadian miner achieved what was widely acknowledged to be the "benchmark" TC of $167 per tonne this year with Korea Zinc. Traders believe that most of the bids lodged will be in the region of $164 per tonne, with the Polaris concentrates more sought after than those of Red Dog. "The tenders reflect what is going on in the market and its value," one Cominco source told MB. European smelters maintain that the present concentrates market is long. "If the market is as long as some people believe it to be, then we would not have seen so much aggressive bidding as we have for this material in Europe. This is where the reality of the market is," the source said. Other industry sources disagree, however. "Whichever company wants to buy concentrates in Antwerp on that kind of basis is either out of its mind, out of the market, or else it is taking a huge gamble," one smelter said. "The market is long and that's all that can be said. How else can this be justified, when there have been benchmark type deals between Latin American miners and European smelters at over $170 per tonne," he added. Tendering zinc concentrates in Europe is not the normal route for concentrate sales by Cominco. Industry sources say that the company sought to "test the water in Europe" to see how the market would react, and to discover whether the claims of one European smelter that the TC be in the region of $172-173 per tonne could be justified. Smelters in Europe have secured TCs below $170 per tonne and say that there is "no way" that they will allow the market to fall further below that level. Swiss-based Glencore International is said to be looking to buy fairly aggressively as a result of the long refined zinc position it currently holds,"but it can't justify paying aggressive numbers for small lots and then turn around to see its own smelters looking for a TC of $175 per tonne," a trader said. Glencore has already been successful in earlier talks with a tender from India's Hindustan Zinc at a TC of $183 per tonne fob. The company has also negotiated -along with Switzerland's Trafigura and Germany's MG -for Simsa concentrates from Peru, in a bid which was reported to be in the "high 150s and low 160s".