China smelters keep Q4 copper guidance price at six-year high

CHINA’S top copper smelters maintained their fourth-quarter guidance for copper concentrate processing treatment and refining charges (TC/RCs) at a six-year high amid expectations of ample supply in the market.

The rates, decided at a meeting of the China Smelters Purchase Team (CSPT) held on Friday (Sep 22), were US$95 per metric ton and 9.5 cents per pound, three sources with knowledge of the matter said.

This rate is the same as that in the third quarter and the highest since the fourth quarter of 2017. It is higher than this year’s annual benchmark of US$88/8.8 settled by Chinese smelters and global miners.

Miners pay TC/RCs to smelters to process copper concentrate into refined metal, offsetting the cost of the ore. The charges tend to fall when supply tightens and rise when more concentrate is available.

The expectation of ample supply was mainly thanks to a production ramp-up at Canadian miner Teck Resource’s Quebrada Blanca Phase 2 copper project in Chile, after it started production earlier this year, one of the sources said.

The global copper concentrate market is forecast to register a surplus this year and next, before entering supply tightness from 2025.

SEE ALSO

Copper bounces on stimulus bets after China sinks into deflation

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

China’s August imports of copper ore and concentrate hit a record monthly high of 2.7 million metric tons, bring its total imports in the first eight months to 18.1 million tons, up 9 per cent from the same period last year, according to China customs data.

The surge in copper imports came as smelters increased production and brought on new capacity this year, after China exited Covid-19 restrictions.

Spot TC, assessed by Asian Metal, climbed to US$93.50 per ton this month, the highest since January 2017. REUTERS