LONDON, March 18 (Reuters) - Zinc treatment charges have been settled 10 percent higher at $245 a tonne of concentrate between Canada’s Teck Resources and commodities group Glencore due to a well-supplied market, Metal Bulletin reported.
The deal, based on a zinc price of $2,000 a tonne, marked an increase from $223 a tonne last year, the publication reported this week, citing unidentified industry sources.
Treatment charges are paid to smelters, in this case Glencore, by mining companies to have their concentrates turned into refined metal. They increase when supplies rise as mining groups compete to find smelters to process their material.
Other details of the settlement include a 9.5 percent escalator to a zinc price of $2,500, with a 7.5 percent escalator above $2,500 and a de-escalator of 3.5 percent below $2,000, the publication added.
Glencore decline to comment on the report.
“There’s no shortage of zinc concentrate at least for 2015 and the zinc price may not be as strong during 2015 as expected by certain market participants,” Citi analyst Jatinder Goel said in a note about the treatment charges. (Reporting by Eric Onstad, editing by William Hardy)