What is crude copper:
Crude copper is about 60% copper matte converted from copper concentrate and about 98.5% copper after blowing in a blowing furnace (converter or flash blowing furnace). Its rough appearance contains pores, which gives it its name, also known as "bubble copper" (English name: Blister Copper). Among them, crude copper is divided into standard crude copper with an average grade of 98% and sub-crude copper with an average grade of 80%, commonly known as black copper or crude copper ingots, which is made from low-grade scrap copper and is used as a supplement to scrap copper raw materials.
Production process of crude copper:
In the process of converter blowing, the grade of crude copper should be judged according to the end point, and the grade of crude copper should be controlled at 97.5% and 99.5%. After redox in the anode furnace, after removing the residual impurities such as lead, zinc, sulfur and iron in the copper, the crude copper is cast into an anodic copper plate to produce electrolytic copper in an electrolytic cell. It can also be cast into copper ingots for processing to make rods, plates, tubes, wires, strips and profiles. The gold and silver and some impurities contained in the anode plate are precipitated at the bottom of the electrolytic cell in the process of electrolysis, which is called "anode mud", which is used to extract gold and silver and so on.
Importance of crude copper:
Electrolytic copper raw materials include copper concentrate, waste copper and crude copper. Crude copper is not only an intermediate product in the process of electrolytic copper production, but also one of the important raw materials in electrolytic copper production. With the acceleration of the global copper mine tightening pace and the strict domestic scrap copper import policy, the proportion of crude copper raw materials is still increasing year by year. Especially in this year, a number of large copper mines occurred frequently, at the same time, the new smelting capacity is gradually released, scrap copper import policy is more stringent, the role of crude copper is particularly important at this time. Crude copper can be directly put into refining as an intermediate product.
Crude copper pricing:
From the point of view of crude copper pricing, the relatively common way is: domestic crude copper spot price = (copper basic unit price processing fee) × copper metal quantity, CIF crude copper price = copper base unit price × (copper metal quantity up to 0.3%) processing fee. Therefore, the changing trend of crude copper processing fees can reflect the cost of smelters for a period of time, in order to judge the market supply and demand.
Significance of crude copper processing fee:
In the copper industry chain, the crude copper processing fee is the treatment and refining cost of converting crude copper into electrolytic copper in the process of copper smelting, which represents the cost of electrolytic copper refining in the smelter. Like TC of copper concentrate, it can reflect the relationship between supply and demand of crude copper. In addition to monitoring the raw material side of the market, for some copper smelters with only rough refining or refining links, the change in crude copper processing fees also reflects changes in production costs and profits, such as the reduction in crude copper processing fees this year, the superposition of this year's reduction in copper concentrate TC, the fall in sulfuric acid prices, and the threat to the living environment of domestic smelters. According to SMM, At present, some small refineries have been shut down because of cost pressure, and for some large state-owned enterprises, the cost of shutting down production is even heavier and can only move forward against the current. Therefore, the crude copper processing fee also plays an important role in understanding the production environment of domestic smelters.
Sources of crude copper in China:
In 2018, China imported a total of 900000 tons of anode copper, of which about 80 per cent were imported crude copper and 20 per cent were imported anode plates. China's main sources of anode copper imports are South Africa and Chile, and most of the anode copper from South Africa comes from Zambia. Because Zambia is currently affected by domestic political factors, most of the mining enterprises, such as Glencore, Vedanta and other mining enterprises, have been affected. From January to May 2019, the cumulative import of anode copper decreased by 15.5% compared with the same period last year.
Current situation of crude copper in China:
Crude copper processing fees have been declining this year. Judging from the crude copper processing fees quoted by SMM, the average price of domestic crude copper processing fees has been reduced from 1550 yuan / ton at the beginning of the year to 1250 yuan / ton at present, and the average price of crude copper processing fees for CIF imports has also been reduced from US $180 / ton to US $160 / ton, reflecting the increase in the purchase cost of crude copper, mainly due to the surge in demand for copper raw materials in the market this year, and the supply of crude copper in the market is also gradually tightening. At present, in addition to the increase in crude copper demand caused by the release of new production capacity in the domestic crude copper market, the decrease in scrap copper supply this year is also another major factor leading to a big increase in crude copper demand. As the current copper price has fallen to 47000 yuan / ton, resulting in the market scrap copper holders to cherish the sale of goods increased, scrap copper production of crude copper has also been suppressed.
Demand for crude copper will continue to grow in the future
According to SMM, the domestic demand for crude copper is still growing, mainly because smelters will continue to release new expansion capacity in the second half of this year, with an estimated capacity of about 300000 tons, but due to the increasingly tight supply of copper concentrate, stimulating market demand for intermediate products. In addition, the import volume of scrap copper is expected to shrink in the fourth quarter, and the current situation that the crude copper market is in short supply is difficult to ease in the short term.
(SMM Kwong Tze-si)