The China Smelters Purchase Team (CSPT) decided on a guide price for treatment and refining charges (TC/RCs) for copper concentrate processing in the first quarter of 2024 at $80/dmt and 8.0 cents per pound at the quarterly meeting on Thursday, December 28 2023. The guidance for the charges was set at $95/dmt and 9.5 cents per pound for the fourth quarter of 2023.
Copper concentrate TC fell at a high pace recently. From December 18-22, Mysteel standard clean copper concentrate TC ranged between $61.4-68.3/dmt, averaging at $65.7/dmt. Due to overseas supply disruptions and the overall trading sentiment, some market participants have either slowed down negotiations of long-term contracts or adjusted marketing strategies.
Currently, market players' purchasing pressure was partially alleviated by unexpired annual contracts, which will be delivered as a priority. Increased supply of domestic concentrates and several smelting programs' suspension since the first quarter of 2024 will also offset the impact of supply disruptions to a certain degree.
On the one hand, the supply of domestic concentrates increased as Jiama Mine, with a production capacity of 86kt, resumed operation in December after a 9-month closure, and Yulong Mine's expansion, completed on November 8, enhanced its annual production capacity from 120kt to 150kt.
On the other hand, overseas supply of copper concentrates encountered uncertainties, with the market focusing on Cobre Panama. On December 20, the Ministry of Commerce and Industry (MICI) of Panama announced that it was seeking a "closure plan" for Cobre Panama, a copper mine with an output of 350kt in 2022. It is expected that the plan will be presented in June 2024.
On the demand side, the last smelting project in 2023, Baiyin Nonferrous Group's 200kt project, will soon start operation. It is also anticipated that six blister copper production projects will be implemented in 2024, among which three will have a temporary suspension phase before the official implementation in the first quarter, causing an output reduction of over 60kt.
Mysteel will continue to follow the negotiations of long-term contracts, which may be smoothed after the Christmas and New Year holidays.
For more information, please subscribe to the 2023 Mysteel Copper Industry Chain Annual Report and 2023 Mysteel Copper Concentrate Annual Report.
Written by Lisa Wang, wangkeshan@mysteel.com
Edited by Paula Xu, xuzhongping@mysteel.com