Spot treatment and refining charges for imported copper concentrates for Chinese smelters stood at $89-$93/mt and 8.90-9.3 cents/lb in the week to Saturday, down from $90-$94/mt and 9.0-9.4 cents/lb the week before, Chinese industry sources said this week.
Jiangxi Copper Corp in its weekly report said industry insiders have revised down their concentrate supply outlook as smelters in China began buying concentrates for the second quarter, paring back earlier expectations of supply remaining ample. That expectation had seen TC/RCs hit $95/mt and 9.5 cents/lb last October.
It said longer run fee offers were mostly below $90/mt and 9 cents/lb, below the target levels of Chinese smelters.
Hubei-based Chinese brokerage Mailyard Futures in its weekly copper report attributed the fall in spot fees to concentrate supply gradually tightening. It noted unionized workers at BHP's Escondida copper mine in Chile had declined wage talks, adding to anticipation that global concentrate supply would tighten further.
A Guangzhou-based Chinese brokerage in its copper report noted there was little global supply growth planned in mined copper in the next five years.
Jiangxi Copper noted the resumption date of Vedanta Resources' smelter in Tuticorin in India had yet to be confirmed and hinged on the outcome of a court hearing on January 21. If the court approves the restart, it could happen by the second quarter and have a flow-on effect on upcoming TC/RC offers, it added.
China Smelters Purchase Team earlier set its floor TC/RCs for the first quarter at $92/mt and 9.2 cents/lb, up from minimum fees of $90/mt and 9 cents/lb for Q4 2018, CSPT member Jiangxi Copper said.
The team was set up in November 2003 to jointly negotiate TC/RCs with overseas copper mines.
Annual term TC/RCs have dipped for a fourth consecutive year, with Jiangxi Copper and Chilean miner Antofagasta inking their term fees for 2019 at $80.80/mt and 8.08 cents/lb, lower than 2018 rates of $82.25/mt and 8.225 cents/lb, according to Jiangxi Copper.
In 2014 and 2015, the term fees were much higher at $97.35/mt and 9.735 cents/lb, and $107/mt and 10.7 cents/lb, respectively, S&P Global Platts reported earlier.
China is forecast to add 780,000 mt/year of copper smelting capacity in 2019 and 600,000 mt/year in 2020, Jiangxi Copper said.
The country's mined copper output growth is lagging that of its smelting sector, resulting in longer term concentrate demand seen exceeding supply, according to Chinese sources.
China imported 1.699 million mt of copper ore and concentrate in November, up 8% from October, and 18.25 million mt over January-November, up 16.4% year on year, latest General Administration of Customs data showed.
