Noranda Income Fund Unit T.NIF.UN

RE:RE:RE:RE:RE:Zinc Premium about 40 cents per pound

[ljp0101]

TCRCs don't need to increase for smelter economics to improve significantly. The 350/t increase in physical premium is ballpark equivalent to a 350/t increase in TCRCs assuming typical concentrate grade and recent zinc prices so we're really at ~600/t right now in the historic framework. This appears to have been mostly "hedged" directly into Glencore's pocket until mid next year, although there won't be a clean number to judge until 3Q financials.

China will pick up the smelting slack and reduce refined imports given they have capacity and cheaper electricity in many cases. Caution for those quoting Chinese TCRCs, the domestic prices sometimes include VAT so don't be mislead when you see someone quoting 550/t.