Spot Copper Concentrate Charges Double in Fortnight on China Cut -Shanghai Metals Market

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Spot Copper Concentrate Charges Double in Fortnight on China Cut

Industry News 11:06:19AM Jul 13, 2010 Source:SMM

HONG KONG, July 12 (Reuters) - Treatment and refining charges that copper smelters receive for turning spot concentrate imports into refined metal doubled in the past fortnight after China cut purchases, smelter officials and traders said on Monday.

Charges to treat and refine spot copper concentrate, or TC/RCs, changed hands about $15-$20 per tonne and 1.5-2 cents per pound to China in July, compared to below $10 and 1 cent in the previous two months.

"TC/RCs have risen because of fewer purchases from Chinese smelters," a trader for a concentrate supplier said.

Reduced Chinese demand raises supply in the Asian spot market given China is the world's biggest concentrate importer, which typically causes spot TC/RCs to rise and makes the concentrate cheaper to smelters.

TC/RCs are the fees paid by overseas concentrate sellers to Chinese smelters to convert imported concentrates into refined copper, and are deducted from sale prices, based on London Metal Exchange copper prices <MCU0>.

Large Chinese smelters were unwilling to buy at TC/RCs below $15 and 1.5 cents, traders said.

But that requirement was still much lower than $46.5 and 4.65 cents for yearly concentrate shipments for 2010 to China settled between Chinese smelters and overseas miners in the beginning of this year, reflecting that the global supplies remained tight, they said.

Large Chinese copper smelters have booked more term shipments for this year, cutting demand for spot concentrate imports, said a trade executive at a smelter in northern China.

He added many Chinese smelters were not expecting copper prices <MCU3> to surge in the second half of the year, therefore they had no rush to build concentrate stocks.

Some smelters in China are also repairing smelting facilities, cutting demand for concentrates.

Dong Ying Fang Yuan Nonferrous Metals on Sunday started repairs at its 200,000 tonnes a year of smelting facility for one month, a senior executive at the firm said.

Yunnan Copper, the third biggest copper smelter in China by smelting capacity above 400,000 tonnes year, has shut down a main smelter in Kunming city in the southwestern province of Yunnan since July 1 for repairs for nine months, according to a company statement.

The smelter had annual capacity of about 200,000 tonnes a year, a company source said.

But traders said Chinese copper smelters were likely to increase spot purchases of concentrate for the fourth quarter as they usually raised metal production to meet yearly output targets.
 

Spot Copper Concentrate Charges Double in Fortnight on China Cut

Industry News 11:06:19AM Jul 13, 2010 Source:SMM

HONG KONG, July 12 (Reuters) - Treatment and refining charges that copper smelters receive for turning spot concentrate imports into refined metal doubled in the past fortnight after China cut purchases, smelter officials and traders said on Monday.

Charges to treat and refine spot copper concentrate, or TC/RCs, changed hands about $15-$20 per tonne and 1.5-2 cents per pound to China in July, compared to below $10 and 1 cent in the previous two months.

"TC/RCs have risen because of fewer purchases from Chinese smelters," a trader for a concentrate supplier said.

Reduced Chinese demand raises supply in the Asian spot market given China is the world's biggest concentrate importer, which typically causes spot TC/RCs to rise and makes the concentrate cheaper to smelters.

TC/RCs are the fees paid by overseas concentrate sellers to Chinese smelters to convert imported concentrates into refined copper, and are deducted from sale prices, based on London Metal Exchange copper prices <MCU0>.

Large Chinese smelters were unwilling to buy at TC/RCs below $15 and 1.5 cents, traders said.

But that requirement was still much lower than $46.5 and 4.65 cents for yearly concentrate shipments for 2010 to China settled between Chinese smelters and overseas miners in the beginning of this year, reflecting that the global supplies remained tight, they said.

Large Chinese copper smelters have booked more term shipments for this year, cutting demand for spot concentrate imports, said a trade executive at a smelter in northern China.

He added many Chinese smelters were not expecting copper prices <MCU3> to surge in the second half of the year, therefore they had no rush to build concentrate stocks.

Some smelters in China are also repairing smelting facilities, cutting demand for concentrates.

Dong Ying Fang Yuan Nonferrous Metals on Sunday started repairs at its 200,000 tonnes a year of smelting facility for one month, a senior executive at the firm said.

Yunnan Copper, the third biggest copper smelter in China by smelting capacity above 400,000 tonnes year, has shut down a main smelter in Kunming city in the southwestern province of Yunnan since July 1 for repairs for nine months, according to a company statement.

The smelter had annual capacity of about 200,000 tonnes a year, a company source said.

But traders said Chinese copper smelters were likely to increase spot purchases of concentrate for the fourth quarter as they usually raised metal production to meet yearly output targets.