RE:RE:TC scuttlebutt says $250Sorry to all. I just noticed that the article I posted is almost unreadable because it is in HTML markup. Below is the article in plain text. Zinc TC/RC benchmark to rise in 2019 on supply resurgence: analysts Author Laura Gilcrest Editor Keiron Greenhalgh Commodity Metals Washington The benchmark zinc treatment/refining charge is expected to rise significantly year on year in 2019, according to analysts, based on a surge in zinc concentrate supplies as well as sharply higher Chinese spot TC/RCs. Not registered? Receive daily email alerts, subscriber notes & personalize your experience. Register Now TC/RCs are the fees miners pay to smelters to process zinc concentrates into refined metal. "Most people expect the TC/RC will go up, and the advantage is with the smelters," said a UK-based metals analyst. "My impression is that there's a quite large difference of opinion between the two sides." Commerzbank analyst Daniel Briesemann had a similar view. "As far as I understand, the last few years, some tensions between the miners and smelters have built. So I don't think the sky is clear at the moment," Briesemann said In any event, whichever side - the miners or smelters - has the negotiating edge in any given year comes down to concentrate supplies, and by all indications, 2019 marks a step on the road back to plentitude. An abundance of concentrate gives smelters the upper hand, while a tight market increases competition among smelters for material to process, which in turn, drives TC/RCs lower. "Most people thought it would take a while for the concentrates pipeline to fill up, but it looks like it's being filled up very quickly," said a zinc trader. The 2018 benchmark TC/RC reportedly settled at $147/mt, down from $172/mt in 2017, amid still tight concentrates supply. But the trader said he thought this year's benchmark could be as high as $210-$230/mt. "I think the smelters are going to dig their heels in and say, 'This is the number,'" he said. Sources said the change in the supply picture for 2019 will be the result of an increase in production in places like China and a series of mine restarts. "We're seeing a buildup of concentrates in China," the trader said. "If you look at the numbers from November-December, we had some very high numbers, especially coming out of Australia, and that's probably going to continue." A gradual recovery in zinc prices sparked a wave of mine restarts, the trader said, after mines were shut when prices tanked a couple of years ago. "Now we're back to the scenario where we've got a lot of zinc concentrate coming out of the ground. The only way you're going to get it made into metal is for the smelters to get paid for it," he said. LME three-months zinc was trading at $2,608/mt Wednesday. The UK analyst agreed. "Most people expect the supply of concentrates to be better over the course of this year. More material will become available," he said, adding that a rise in TC/RCs this year would be the first since 2015. He also saw concentrate production in China as a big factor. "That's always going to be a point of debate because the statistics around mining operations in China are even patchier than for metal production," he said. Briesemann added: "Zinc mining production will be expanded quite significantly this year due to various projects either being commissioned or being expanded, including projects in South Africa and Australia." According to the International Lead and Zinc Study Group, global zinc mine production rose 1.7% year on year in the first 11 months of 2018, mainly due to output increases in Australia, and rises in Eritrea and the US. But another factor is also looming large in this year's TC/RC talks, China's spot TC/RCs. "It will be a very important point of reference in the discussions," said the UK analyst. "It has been rising very steeply in recent months. ... The spot TC is now a long way above last year's benchmark, whereas in previous years, the spot market has been below the benchmark when the negotiations have come around." During 2018 negotiations, he said, China's spot TC was around $20/mt or less. "So it's not surprising that the 2018 benchmark was reduced," he said. Currently, China's spot TC/RC is trending at around $250/mt. DOES PRICE PARTICIPATION STAY OR GO? Also up for discussion in this year's negotiations is price participation, whereby smelters get an agreed-upon percentage of a zinc price increase during the year via price escalators, which comes on top of the base TC/RC. Conversely, a TC/RC deal that includes de-escalators reduces the base fee by set percentages if the zinc price falls. The 2018 benchmark TC/RC included "zero" escalators/de-escalators, the UK analyst noted, which he said he believed could happen again this year. "Two or three years ago, people were expecting - rightly as it turned out - there would be quite a strong rise in zinc prices," he said. "That's why the miners wanted to exclude price participation, so they could get the benefit of that rise in prices." But with prices this year facing more of a downside risk, he said: "Some smelters are in quite a tough position financially and so [price de-escalators] may not suit them ... so there's a possibility that price participation will again be very limited or [the parties] will agree on flat terms." The zinc trader said smelters in particular can use price participation to their advantage. "They may be in such a strong position that they can take the de-escalator out and put an escalator in," he said, adding that an escalator set to trigger at a $200-$300 increase over the current zinc price would be advantageous for smelters. CHINESE REACTION TO HIGHER TC/RC China is likely to step up its refined zinc production amid higher treatment charges in 2019, the trader said, and, as a result, "as we get into summer, I think you will see zinc stocks going up." However, the UK analyst said that this year, China's refined zinc production is expected to be flat to its 2018 output, or only moderately higher. But one wild card in the game is reported cuts in Chinese smelter capacity in an effort to curb pollution.