Spot treatment and refining charges for Chinese smelters edged up to $85-$92/mt and 8.5-9.2 cents/lb last week, from $84-$91/mt and 8.4-9.1 cents/lb in the preceding week, as producers have ample copper concentrate stocks, Jiangxi Copper Corp said in its copper sector report late Wednesday.
The copper giant said at present, mainstream spot fee offers were at over $90/mt and 9 cents/lb. It noted Chinese industry participants would rather wait and see, as smelters were not eager to buy due to ample concentrate inventories.
And with TC/RC annual term talks for next year coming up soon, market focus is now on whether the growth in global mined copper output would match the pace of growth in China's copper smelting capacity.
TC/RCs, the fees paid to smelters by mines, for converting the concentrate into refined copper, are a key source of revenue for smelters.
Other Chinese industry participants have also noted a rise in spot TC/RCs amid ample concentrate supply.
State Development & Investment Corp. said in its October copper sector report that spot TC/RCs for China rose to $85-$92/mt and 8.5-9.2 cents/lb last week, attributing the rise to sufficient concentrate stocks held by Chinese copper smelters.
SDIC forecast spot TC/RCs to continue hovering above $90/mt and 9 cents/lb levels in the near term, as domestic concentrate supply was seen to stay adequate, before the start of the 2018 TC/RC term discussions.
China imported 1.47 million mt of copper concentrate in September, up 5.8% year on year, while imports over the first nine months rose 3.2% on the year to 12.57 million mt, data from the General Administration of Customs showed.
Meanwhile, for the first time this year, Jiujiang port in southeastern China's Jiangxi province -- a key Chinese copper production base -- rejected a 100 mt shipment of copper concentrate from Mexico in mid-October, as tests found the shipment to contain fluoride content of 0.14%, exceeding China's state-set limit by 40%, according to the Jiujiang branch of the General Administration of Quality Supervision, Inspection and Quarantine.
It said due to the continuous rise in domestic refined copper prices, concentrate traders in China had hoped to ride on imported concentrate trades to cash in on escalating prices.
This led them to focus on just the copper content in concentrate shipments when concluding deals or conducting pre-shipment inspections, often overlooking the radioactive and harmful elements which pose hazards to the environment.
AQSIQ urged traders and producers in China to add relevant harmful and radioactive element clauses into their contracts, and pay by letters of credit to mitigate losses stemming from cargoes rejected.
China's copper concentrate imports (25% metal contained) this year is forecast at 4.5 million mt, up from 4.263 million mt last year, according to estimates by state-owned nonferrous metals information division Antaike.
The country's copper concentrate output is expected to reach 1.65 million mt this year, edging up from 1.614 million mt in 2016.
Antaike said China's fast-rising copper smelting capacity in recent years has hiked demand for concentrate, with concentrate demand having grown much faster than domestic mined copper output growth, resulting in a gradual widening of the gap between domestic mined copper output and mined copper demand.
But due to the sharp rise in copper concentrate imports, China's overall concentrate supply will remain in surplus this year.
China is forecast to have a copper concentrate surplus of 50,000 mt in 2017, narrowing from surplus of 378,000 mt last year, Antaike data showed.
Copper concentrate demand this year is seen at 6.1 million mt, up from 5.499 million mt last year, against total supply of 6.15 million mt in 2017, up from 5.877 million mt last year, the data showed.
