BEIJING/HOUSTON - Zhuzhou Smelter Group, one of China's largest zinc smelters, broke a supply contract with Teck Resources' Red Dog mine in Alaska earlier this year due to hefty tariffs fueled by Beijing and Washington's trade war, two sources familiar with the matter told Reuters.

Vancouver-based Teck supplies zinc concentrate from Red Dog, one of the world's largest zinc mines, to global clients including in Asia.

The world's two largest economies imposed triple-digit tariffs on imported goods from each other at the height of a trade war earlier this year.

Both reached a trade truce and trimmed the whopping tariffs after multiple rounds of trade talks and a meeting between US President Donald Trump and his Chinese counterpart, Xi Jinping, in South Korea in late October.

But the existing double-digit reciprocal tariffs still make it hard for Chinese smelters to import zinc concentrate from the United States, said the first source.

"As long as the tariffs are in place, it's impossible to import zinc concentrate from the US," said the first source, adding that it also applies to the imports of lead concentrate.

Both sources requested anonymity as they are not authorized to talk about sensitive commercial matters.

Zhuzhou Smelter Group found it hard to fulfill the contract with Teck amid the current tariffs and had to pay a break-up fee, the first source said, while declining to disclose details on the fee.

Zhuzhou Smelter, a subsidiary of the State-run China Minmetals, and Teck did not respond to a Reuters request for comment.

The Chinese zinc smelter typically buys 30% of needed concentrate from abroad, according to the first source.

China only imported 2 kilograms of zinc concentrate from the US in the first 10 months of this year, compared with 78 871 tons over the corresponding period in 2024, customs data shows.

But China's total zinc concentrate imports from January to October jumped by 37% year-on-year, according to customs data.

Zhuzhou Smelter, headquartered in eastern China's Hunan province, boasts a production capacity for zinc products at 680 000 metric tons per year.