Metals News
Restocking demand lowers copper concentrate TCs
smm insight
11:56AM
Feb 2,2019
Source:SMM

SHANGHAI, Feb 2 (SMM) – Treatment charges (TCs) for spot copper concentrate dropped in the last trading week before the Chinese New Year as restocking demand lowered the price negotiating power of small and medium-sized smelters.

SMM assessments showed that TCs for spot clean copper concentrate stood at $80-88/mt as of Friday February 1, down $7/mt from a week ago and lower than the floor charges of $92/mt, set by the China Smelters Purchase Team (CSPT) for the first quarter.

This surprised the market that expects spot copper concentrate TCs to remain relatively high in the first half of 2019, given scheduled maintenance across global copper smelters, continued suspension of Vedanta’s copper smelter in India and the possibility of slower capacity expansion in China.

SMM learned that transactions made by small and medium-sized smelters who are not members of CSPT accounted for the decline in TCs. Those smelters rely more on spot cargoes than long-term contracted supplies.

The smooth commissioning and operation of new copper smelting capacity in China and rising hopes of the restart at Vedanta’s copper smelter eroded the bargaining power of smelters who needed to restock, resulting in a drop in spot copper concentrate TCs.

Spot copper concentrate TCs currently occur at $85-90/mt for CSPT member smelters while at $80-85/mt for non-CSPT member smelters.

The upcoming start of maintenance across global copper smelters and delayed restart of Codelco's smelters might provide some support to spot copper concentrate TCs after the CNY break, while TCs are likely to see declines in the longer term.

Market commentary
Copper
Copper concentrate
TCs
For queries, please contact Frank LIU at liuxiaolei@smm.cn
For more information on how to access our research reports, please email service.en@smm.cn
Related Price

No Data