BEIJING- Spot charges for processing copper concentrate in China have risen to their highest in eight months as the coronavirus outbreak and associated constraints on production and logistics leave smelters unable to take shipments.
Treatment and refining charges (TC/RCs), paid by miners to smelters to process copper ore into refined metal, climbed to $62.50 a ton and 6.25 cents a pound on Monday, as assessed by industry pricing and information provider Asian Metal.
On the day much of China went back to work after an extended Lunar New Year break, that was a rise of $1 from TC levels of $61.50 over the past month, and marked the highest assessment since June 10, 2019.
Smelters in China, the world’s biggest copper consumer, need less concentrate after the coronavirus outbreak because factory shutdowns and transport curbs mean they have not been able to offload high inventories of byproduct sulphuric acid, which are limiting their capacity to produce more copper.
Charges increase when there is more abundant supply of copper concentrate and go down when the market tightens. The annual miner-smelter TC/RC benchmark for 2020 was agreed at $62 a ton and 6.2 cents a pound, the lowest in nine years amid rising smelter capacity and limited mine supply growth.
“Some smelters may cut production because of high sulphuric acid stocks. TCs may go up further,” one China-based trader said. — Reuters
