Copper concentrate supply in China stayed tight this week, with some major Chinese smelters having followed the benchmark treatment and refining charges as settled by Chinese copper producer Jiangxi Copper and copper miner Freeport-McMoRan for 2017 at fees of $92.50/mt and 9.25 cents/lb in mid-November, Chinese brokerage Mailyard Futures in Hubei Province said in its copper sector issued Thursday.
Mailyard said the mined copper supply in China has remained short this week, with traders having low concentrate stocks, with some Chinese smelters having inked spot TC/RC deals at less than $90/mt this week.
The 2017 TC/RC benchmark was 5% less than $97.35/mt and 9.735 cents/lb in 2016.
TC/RCs, the fees paid to smelters by mines, for converting the concentrate into refined copper, are a main source of revenue for smelters.
Meanwhile, another Chinese brokerage -- Huatai Futures in Guangzhou City -- said in its copper sector report issued Thursday that Chinese copper smelters have begun competing for copper concentrates now, due to an anticipated 600,000 mt/year new copper smelting capacity in China to be put into operations during 2017.
However, the brokerage said limited mined copper supply in the world has resulted in lower TC/RCs. It said despite growing copper smelting capacity in China, domestic refined copper output will be limited due to tight mined copper constraint.
China has relied heavily on imported copper concentrate for processing as domestic copper ores mostly have poor grade, with not many rich ores, with national copper average ore grade of just 0.87%, less than one-third of that in the world's main copper mines, figures from Ministry of Land and Resources showed.
