https://www.metalbulletin.com/Article/3663715/Escalators-payables-on-the-line-as-zinc-concentrate-benchmark-talks-heat-up.html
Zinc miners are pushing to revamp annual concentrate benchmark supply agreements with smelters by removing escalators and raising zinc payables to take advantage of a historically tight spot market, parties close to talks said.
In offers to smelters for 2017 annual contracts, miners have pushed to eliminate the escalator system, which lifts agreed treatment charges (TCs) if the zinc base price rises, sources confirmed. Miners last month tabled initial offers for zinc concentrate TCs for 2017 at around $100 per tonne with no escalators, which equates to a drop of $172 per tonne on this year’s numbers. Miners and smelters signed 2016 contracts with TCs at $203 basis a zinc price of $2,000 per tonne and price escalators of 8% above $2,500 per tonne. Smelters, which are currently enjoying a TC of $272 per tonne on tonnages pegged to the 2016 benchmark, were originally looking to secure deals for this year closer at $200. And although miners and smelters have subsequently moved closer on headline TC numbers, the escalator system remains a sticking point, sources said. "We will have to keep the treatment charge with the scale structure," a...