April Fools’ Day, Copper Concentrate Spot TCs for Chinese Copper Smelters to Rise in Q2?

SHANGHAI, Apr. 1 (SMM) – News heard in early Friday, April Fools’ Day, that Chinese copper smelters are looking for a 12% rise in spot TC/RCs for copper concentrate shipments during Q2. Is it true? SMM has contacted major market players, and gets first-hand information about it. 

Chinese copper smelters will actually consider lower spot TC/RCs for Q2 ore shipments, SMM learns, down to $85 from Q1’s $100 per tonne. 

Why?

“This should be due to ore supply shortages from the unfavorable price ratio,” SMM copper analyst said. 

The SHFE/LME copper price ratio has been falling back from highs since January 2016, and losses for imports are on the rise, from 77 yuan in January, 720 yuan in February, to 1,312 yuan in March, according to SMM data. 

The unfavorable price ratio will have depressed import activities, and this will be reflected during the second quarter. 

In fact, spot TCs for domestic copper concentrate showed signs of falling, averaging $95 per tonne in January, and $81.7 per tonne in February, SMM data showed.  

The $85 level should be the lowest price acceptable to domestic smelters, SMM adds.    

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