SHANGHAI, Dec 28 (SMM)—The benchmark refining charge (RC) of blister copper for 2021 is expected to stand at $140-145/mt, slightly lower than the current cif RC but a sharp increase compared to previous expectations due to ample supply. The inflow of copper scrap has increased since November 1 when the secondary copper resource policy took effect, growing domestic supply of blister copper. The market expects that the dependence on imported blister copper will weaken. Both domestic and cif spot RCs stood at high levels, reflecting sufficient blister copper supply.

Long-term benchmark TCs of copper concentrates under long-term contracts in 2021 were finalised at $59.5/mt. Long-term contract benchmark RCs of blister copper have become a market focus. Long-term contract benchmark RCs of blister copper for 2020 were decided on December 16, 2019, and were basically finalised in mid-December over the past few years. However, cif long-term contract RCs for 2021 are unlikely to be determined until early next year. Domestic long-term contract TCs have little guiding significance to the market due to the fluctuation room provided.

The delay in the determination of cif long-term contract RCs of blister copper for 2021 is due to the cancellation of the 2020 Asia Copper Week amid COVID-19 and the delay in the determination of long-term contract TCs of copper concentrate. In addition, smelters are at odds over the value-added tax imposed by the customs over gold content in imported plate-shaped copper anode, favouring to import copper anode plate which is produced from blister copper (The output VAT can not be offset due to the absence of value-added tax for the domestic sale of gold). 

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