Copper concentrate output to increase in 2021 despite low benchmark TCs

SHANGHAI, Dec 15 (SMM)—Chinese copper smelters China Copper, Tongling Nonferrous Metals, Jiangxi Copper, Jinchuan Company and US miner Freeport-McMoRan have agreed on the 2021 copper concentrate treatment charges (TC) in their long-term contracts at $59.5/mt, and refining charges (RC) at 5.95 cent/lb, slightly lower than the 2020 benchmark of $62/mt and 6.2 cent/lb, basically in line with previous expectations.

Copper concentrate TCs in long-term contracts have been lower than $65/mt for two consecutive years, a mark considered a break-even for Chinese smelters with full cost taken into consideration, while spot copper concentrate TCs have been below this level since April 2019. SMM believes that production at Chinese copper smelters will not be affected in 2021 as current TCs remain higher than smelter’s cash costs, and copper cathode output is likely to rise 330,000 mt to 9.61 million mt.

Although 2021 copper concentrate benchmark TCs recorded a new low since 2011 amid low spot TCs and uncertainties of the COVID-19 pandemic, SMM estimates that copper concentrate output is expected to increase by 1.44 million mt in 2021 and maintain a rapid growth in the next three years as global large-scale copper concentrate projects will be put into operation during 2021-2023. Spot TCs are expected to rebound in the second half of 2021 as new projects come online.

More information and a deep-dive of the China domestic copper industry in SMM's China Copper Industry Chain Annual Report. Reserve your copy now.