Spot copper TC drops slightly on sufficient stocks

SHANGHAI, Dec.18 (SMM)－Spot treatment charges (TC) of imported copper concentrate were lowered by $1/mt to $83-91/mt as of Friday as sellers cut offers to offload their cargoes, according to SMM assessment. Transactions were heard at $85-88/mt.

Few offers were heard above $90/mt as large smelters generally have sufficient stocks. In fact, some larger-sized smelters have enough stockpiles to support their production until the end of the first quarter next year, according to sources at China Smelters Purchase Team (CSPT) last week.  

SMM believes the reason for smelters to build on their stocks is a precaution in the case of delayed negotiations in long-term contracts. A lot of purchases done in September this year when TC prices went up were to add to smelters’ bargaining power. This has led to record-high imports in November at 1.78 million mt. Sources added that copper concentrate inventory at ports are still increasing and we see December imports remain high.

In addition, some smelters were heard to have reached an agreement on TC for their long-term contracts and that it could be set as a benchmark for 2018.

In the domestic market, the pricing coefficient of clean copper concentrate with 20% Cu is now 84-85.5% at a price-to-factory basis, and that of 25% Cu concentrate is 86.5-88%.

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