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China’s TC/RCs for imported copper drop on slow growth expectations-2019 China(Guangzhou)Int’l Non-Ferrous Metal（Copper）Exhibition
11/22/2018 有色金属展-Copper exhibition -non-ferrous metals expo |
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Platts reported that Chinese analysts attributed the drop in fees to the anticipated slow down in the world’s mined copper output growth, amid the building of new smelters in China. Spot treatment and refining charges for imported copper concentrates for Chinese smelters were at $90-$94/mt and 9-9.4 cents/lb in the week ending November 17, flat from the preceding week. China has inked the 2019 term TC/RCs at $80.80/mt and 8.08 cents/lb, down $1.45/mt from this year
Jiangxi Copper and Chilean Antofagasta inked the term fee for 2019 at $80.80/mt and 8.08 cents/lb, lower than 2018 rates of $82.25/mt and 8.225 cents/lb, Jiangxi Copper said in its weekly report, noting that the 2019 fee is in line with Chinese smelters’ target level.
But Jiangxi Copper said the fee for the first quarter of 2019 was above $90/mt, and 9 cents/lb, and that they expect ample supply of near term spot concentrate before the restart of overseas smelters.
Hangzhou-based Chinese brokerage Nanhau Futures said in its copper report that since Q2 this year, spot fees kept rising, due to problems at various smelters in India, Philippines and China.
The brokerage said the world’s mined copper supply is still limited, with the globe’s 2019 copper concentrate supply seen adding just 500,000 mt. Jiangxi Copper shared similar views, noting that the global mined copper supply was 16.47 million mt in 2018, with 2019 supply growth rate expected at just 2.7% year on year.
It said the high TC/RCs over the past few years has spurred investment in copper smelters in China, with plant building concentrated in the past two years, therefore pushing down annual term fees.
Spot fees rose from $73-$75/mt, and 7.3-7.5 cents/lb in Q1 this year to $93/mt, and 9.3 cents/lb in the week ended September 22, according to S&P Global Platts data.
Jiangxi Copper forecast China’s Q4 copper concentrate supply to stay ample, and so are keeping spot fees at high levels from now to the end of this year
Meanwhile, China is forecast to add new copper smelting capacity of 780,000 mt/year in 2019 and 600,000 mt/year in 2020, Jiangxi Copper said, noting that market players were concerned about a possible conflict in future domestic copper smelting growth and concentrate demand.
Future domestic mined copper output may not keep pace with the rising smelting capacity in China, which could lead to demand for concentrate exceeding supply, according to Chinese industry sources.
China imported 1.569 million mt copper ore and concentrate in October, down from 1.93 million mt in September, with January-October imports at 16.558 million mt, up 19% year on year, data by the General Administration of Customs showed. 有色金属展-铜材展-2019年广州国际有色金属工业（铜业）展览会-2019 China(Guangzhou)Int’l Non-Ferrous Metal（Copper）Exhibition -Non-Ferrous Metal exhibition, 2019
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