TCs of copper concentrate likely to rise in 2021 amid concentrated supply

SHANGHAI, December 7 (SMM)— The result of the copper concentrate treatment charges (TC) in their long-term contracts for 2021 is expected to be finalised in the coming week or this week, according to market sources. SMM understood that the market expects  the benchmark TC of long-term contracts to be set at around $57-62/mt. TC/RCs are expected to trend higher in 2021 due to concentrated commissioning of increased copper concentrate capacity in the second half 2020. Supply of copper concentrate is likely to remain tight in the first half of the year.

Spot treatment charges (TCs) of copper concentrate have stood at low levels in 2020 and fell below $50/mt in the second half of the year, leaving smelters in losses.

According to SMM calculations, global copper concentrate output with copper content is expected to increase 7% in 2021, driven mainly by increased capacity at Grasberg underground operations, Phase II of Spence mine, Kamoa mine and recovered output at mines in South America from COVID-19. Global smelting output in 2021 is expected to increase by around 850,000 mt with metal content. The 400,000 mt/year of copper smelting project at Daye Nonferrous Metals will be the key driver, in addition to recovered output at overseas smelters. In view of inventories for new and resumed production capacity, global copper concentrate supply and demand will be balanced in 2021.

However, political turmoil after the deposition of Peru’s president is likely to cause disruptions to copper concentrate supply.

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