LONDON (Reuters) – The copper market may be stuck in a well-worn trading range but there is plenty of action unfolding in the mine concentrates segment of the copper supply chain.
China’s copper smelters have just slashed their minimum charges for converting concentrates into refined metal. The 10-member China Smelters Purchase Team (CSPT) has set treatment and refining charges at $55.00 per tonne and 5.5 cents per lb respectively for third-quarter deliveries.
That’s down from $73 and 7.3 cents in the second quarter and from $92 and 9.2 cents in the first quarter. It is now sufficiently low to cause margin distress for higher-cost smelters. Tumbling treatment charges reflect a tightening market for copper raw material.
They are also putting further stress on an already creaking benchmark system of pricing copper concentrates. This was always going to be a year of low or no copper mine production growth.
The International Copper Study Group (ICSG) forecast minimal growth of 0.2% this year at its spring meeting in May. Even that low-ball figure is looking optimistic with global production of concentrate falling 1% in the first quarter of this year, according to the group’s latest monthly statistical update.
For the rest of this article: https://uk.reuters.com/article/us-metals-copper-ahome/column-copper-concentrates-tightness-threatens-benchmark-pricing-idUKKCN1UD1Y6