Not the demand for zinc - the demand for zinc concentrates....

Not the demand for zinc - the demand for zinc concentrates. These can be quite different - evidenced by current situation the low LME stocks & relatively healthy price of zinc metal. Zinc concentrates however are in surplus right now with high TCs. As I mentioned in my previous post - I am talking about the current market for zinc concentrates.

If the Zinc concentrate market was in shortage (low TCs) the smelters would be more likely to take it because of a lack of options.

Offtake agreements don’t mean squat (in a surplus market) if the supplier cannot supply within agreed contractual specifications. 

If a smelter has a choice between a spot purchase of 10,000mt New Century (47%) or 10,000mt Dugald River (52%) aside from the penalties/additional difficulties to treat - if the smelter chose NC it is missing out on 5% Zn production over that 10,000mt it will treat. 
The smelter will need to get compensated from NC for the 15% smelter payablity x extra 5% Zn x spot zinc price + any premium over LME price it is able to charge its own customers of zinc metal. Just this alone shows  why the current spec is likely selling with a higher TC than standard zinc concentrates.