SHANGHAI, Nov. 27 -- Spot copper treatment and refining charges (TC/RCs) fell to as low as $8 per tonne/0.8 cents per lb in China this week, after staying stable at around $20/2 for several months, sources told MB.
"I've heard the lowest transacted offer at $8/0.8, which is totally unprofitable for local smelters," said a concentrates supplier in eastern China.
Some smaller producers are still continuing to take material at these prices in order to keep their smelters running, but also because by-product prices, including gold and sulfuric acid, have risen strongly.
"Some smelters will accept the offers, as long as gold prices stay high for the next few weeks," said an analyst in Shanghai.
Gold prices are moving towards $1,200 per oz in rally fueled by dollar weakness.
"Sulfuric acid prices have recovered recently, and are now quoted at an average of RMB 300/mt ($44), much higher than RMB 150-200/mt a few months ago," he added.
Both these factors mean some suppliers are even pushing TC/RCs at zero, "but I'm not sure if that has been transacted", the analyst said.
"Before the annual benchmark is settled, overseas suppliers are giving lower offers even if they are in no hurry to sell off their inventories," said an analyst in Beijing.
"But large-sized domestic smelters have agreed not to accept any TC/RCs offers lower than $40/4," he said, "honestly most of the materials are stockpiled by trading houses."
(Source: Metal Bulletin)