Copper smelters in China keep first quarter processing costs at same level as last quarter

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December 29 (Reuters) – China’s major copper smelters kept ground processing and refining (TC / RC) charges for copper concentrate in the first quarter of 2022 at the same level as in the previous quarter, said Wednesday two people knowing the subject.

The rates were set at $ 70 per tonne and 7 cents per pound during a meeting of the Chinese Foundry Purchasing Team (CSPT) held online on Wednesday, the sources said.

The new rates are 32% higher than the $ 53 per tonne and 5.3 cents per pound set during the same period a year earlier.

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Miners pay TC / RC to smelters to turn copper concentrate into refined metal, offsetting the cost of ore. Loads decrease when supply tightens and increase when more concentrate is available.

Jiangxi Copper (600362.SS), Tongling Nonferrous (000630.SZ), China Copper, and other members of the CSPT in China, the largest consumer of copper, are expected to meet the floor price when entering into processing agreements in China. counting for imported concentrates.

The first quarter floor is higher than a recent deal between US miner Freeport-McMoRan Inc (FCX.N) and Chinese smelters for $ 65 per tonne and 6.5 cents per pound for forward supply of copper concentrate next year.

This regulation is expected to be the annual benchmark for 2022, which will be referenced in concentrate supply contracts around the world. This represents a 9.2% increase over this year’s benchmark and is the first time that foundries have managed to achieve better annual conditions since 2015.

“The fourth quarter rate is a reaction to the current market situation,” said one of the sources, who declined to be identified because he was not authorized to speak to the media.

Analysts expect the tight supply from the copper mine seen in recent years to ease in 2022, although it is uncertain whether the Las Bambas mine in Peru, which produces around 2% of the copper global, will be able to resume and maintain operations after one month. long transport blockade. Read more

Spot processing fees in China, as assessed by Asian Metal, fell to $ 59.50 per tonne this week, after remaining at $ 60.50 since early September, indicating a tighter concentrate market . Loads languished at a decade low of around $ 30 per tonne in April.

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Reporting by Emily Chow and Tom Daly; Editing by Christian Schmollinger and Devika Syamnath

Our Standards: Thomson Reuters Trust Principles.

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