Hong Kong — Spot treatment and refining charges for imported copper concentrates for Chinese smelters were at $83-$90/mt and 8.3-9.0 cents/lb in the week of July 9-15, flat from the preceding week, Chinese industry sources said this week.
Spot fees rose from $74-$81/mt and 7.4-8.1 cents/lb in the third week of May to $83-$90/mt and 8.3-9.0 cents/lb in the last week of June on expectations that copper concentrates meant for India would be diverted to China after the shutdown of the Tuticorin smelter, Chinese industry sources said.
At the end of April, the TC/RC fees were less at $70-76/mt and 7-7.6 cents/lb.
Jiangxi Copper Corp in its weekly copper report said that spot TC/RC fees were stable last week as smelters in China had replenished their stocks of concentrates. The China Smelters Purchase Team had set the target fees at $90/mt and 9 cents/lb and was not eager to buy below this level, it added.
Tongling Nonferrous Metals Group in its copper report said that despite environmental checks having resulted in the shutdown of some domestic mines due to water pollution, cutting mined copper output, the shutting of some blister copper smelters had reduced the demand for imported concentrates, easing the supply tightness and spurring a continual rise in spot fees.
CSPT, at its end-June meeting, set the floor fees for the third quarter at $90/mt and 9 cents/lb, up from $78/mt and 7.8 cents/lb, Tongling said.
Since early Q2, smelters in India and the Philippines cut their operating rates on environmental issues, resulting in more concentrates being shipped to China, spurring bullish sentiment.
India's Vedanta has been ordered by the Tamil Nadu government to seal its copper smelter plant 1 at Thoothukudi, or Tuticorin, permanently, the company said on May 29.
CSPT has cut its floor TC/RCs for Q2 to $78/mt and 7.8 cents/lb, down $9/mt and 0.9 cents/lb from the minimum fee of $87/mt and 8.7 cents/lb for Q1, Jiangxi Copper said. Set up in November 2003 to jointly negotiate TC/RCs with overseas copper mines, CSPT has set the fees at $95/mt and 9.5 cents/lb for Q4.
TC/RCs, the fees paid to smelters by mines, for converting the concentrate into refined copper, are a key source revenue for smelters.
China imported 9.552 million mt copper ore and concentrates in the first six months, up 15.7% year on year, latest data from the General Administration of Customs showed.
The country's demand for mined copper is expected to rise 7.7% year on year to 6.15 million mt in 2018, according to data released by state-owned metals consultancy Beijing Antaike in March.
China is expected to add 550,000 mt/year of blister copper output capacity and 650,000 mt/year of refined copper production capacity in 2018, bringing its blister copper and refined copper output capacity to 7.15 million mt/year and 11.57 million mt/year, respectively, Antaike said.
The country is forecast to have a mined copper surplus of 350,000 mt this year, widening from a surplus of 279,000 mt last year, according to Antaike.
China's imports of copper concentrates (25% metal contained in copper ore and concentrates) in 2018 was expected to rise to 4.8 million mt from 4.35 million mt last year, Antaike said.
