Chalco Said to Be First to Benefit from Direct Electricity Supply

BEIJING, July 8 -- The copper processing charge rate for China's refining enterprises has plunged nearly 70 percent on the spot market since this year's beginning, mainly due to the strong demand for copper concentrate.
&nbsp;&nbsp;&nbsp; A large company manager told the reporter that copper processing charges have dropped from 90 U.S. dollars/ton at the beginning of this year to 25 U.S. dollars/ton now. If refining companies buy spot copper concentrate from abroad for production, they will definitely be unable to make breakeven, he added.
&nbsp;&nbsp;&nbsp; The copper processing charges are what mining enterprises pay to smelters for refining copper concentrate into refined copper.
&nbsp;&nbsp;&nbsp; Copper processing charges rallied at the beginning of this year due to faltering demand for raw materials. Some Chinese copper enterprises locked the long-term contractual processing charges to 75 U.S. dollars/ton with the international mining giants at that time.
&nbsp;&nbsp;&nbsp; However, as the government's stimulus measures start playing positive effects, copper prices have rebounded quickly and maintains at around 40,000 yuan/ton.
&nbsp;&nbsp;&nbsp; Analysts say that the sharp decline of processing charges may put lots of Chinese copper enterprises into a hard situation because more than two thirds of the imported copper concentrate is traded on the spot market.
&nbsp;&nbsp;&nbsp; China's 20 key copper smelters gained profits of 841 million yuan in May, and their profits in January-May period reached 2.06 billion yuan, boasting the best profitability in the domestic nonferrous metals industry.
&nbsp;&nbsp;&nbsp; Customs data show that the country's copper concentrate imports in the first four months rose three percent year on year to 1.9 million tons.
&nbsp;&nbsp;&nbsp; Insiders reveal that some enterprises are purchasing copper concentrate to be delivered in the following several months with processing charges lower than 25 U.S. dollars/ton.
&nbsp;&nbsp;&nbsp; However, an official with the China Minmetals Corporation said that copper prices are likely to go down in the third quarter, weighed by the lackluster demand from the international market as well as the traditional slack season for consumption in summer.
&nbsp;&nbsp;&nbsp; If processing charges can't get improved in the fourth quarter, the price talks for the long-term contractual price next year may be affected, a member of the negotiation group said.
&nbsp;&nbsp;&nbsp; (Source: chinamining.org)