Copper conc TC/RCs up on stable tender terms; smelters active

Copper concentrate treatment and refining charges (TC/RCs) went up marginally in late May from record low levels on May 24, while traders continued to take spot tonnages at similar terms and smelters became more active.

Fastmarkets’ Asia-Pacific TC/RC index rose to $58.90 per tonne/5.89 cents per lb on Friday May 31, compared with $58.30 per tonne/5.83 cents per lb a week ago when it was at the lowest since price launch in due to smelters' hesitance to purchase new material in the spot market while the downward trend in the charges remains intact.

Traders continued to take tonnages over the week, while tenders for Pinto Valley concentrates went in the low $50s per tonne for both this year and next and one lot of Boddington concentrates was awarded in the $40s per tonne. Traders also bought Chapada, Toquepala and Cuajone parcels in a range from mid-$40s per tonne to low $50s per tonne.

Multiple nearby parcels comprising Los Bronces, Phukham, Carmen, Antapaccay and some other brands were sold to Chinese smelters in the low to high $60s per tonne. Some Mongolia-origin Erdenet concentrates were sold in the low $70s per tonne to a smelter in Western China.

Some July and August parcels were heard to be sold in the low $60s per tonne over the week, Fastmarkets learned.

The Chinese Smelters Purchase Team will hold their quarterly meeting on July 18 in Hunchun city, home to one of Zijin Mining’s major operations. The ten largest Chinese copper smelters will decide the third-quarter purchase floor at the meeting.

Guangxi Nanguo faces further setbacks to output resumption
Although more Chinese smelting capacity has come online this year, new joiners including Guangxi Nanguo are facing problems. The operator of the 300,000-tonne-per-year copper smelter has had to extend the shutdown of a primary smelter until mid-June, Fastmarkets learned.

Guangxi Nanguo has been one of the most active spot buyers over the past few months, both before and after its commencement in early April 2019.

After less than one month, the company announced the shutdown of its primary smelting operation for an upgrade till mid-May.

The primary smelting operations will not come back online for another month so raw material purchasing has stopped, sources closed to the matter told Fastmarkets.

Meanwhile, Yunnan Copper’s new 400,000-tpy Chifeng smelter produced its first copper anode output on May 22, the company said.

The new facility is able to smelt more complex materials into blister copper, thus the majority of the feed is blended materials, a company source said.

Chuquicamata copper workers vote for strike
On the supply side, three trade unions at Codelco’s Chuquicamata division voted to go on strike when they rejected the latest contract proposal from the Chilean state-owned copper miner, unions said on Wednesday May 29.

The company and the unions both have the option - within four days - to ask authorities to mediate a negotiation on a new contract of employment for workers at the mine. Once the mediation has been scheduled, the parties will have five days to reach an agreement.

Chuquicamata is the third-largest among Codelco’s units and produced 320,744 tonnes of copper in 2018. Trade union workers at the site also went on strike in July 2018.

The division is currently ramping up its flash smelter, which was halted in mid-December for upgrades that would allow it to meet new Chilean emission standards.

KCM copper ops unaffected by liquidation order so far; Vedanta execs denied site visit
Uncertainties have arisen for production output from Zambia, Africa’s second largest copper producer.

The Zambian government filed an official document to the High Court to liquidate the assets of Konkola Copper Mines (KCM), which is majority-owned by Vedanta Resources, on May 21.

KCM runs the country’s largest copper smelter, Nchanga, as well as the Konkola and Nchanga mines.

Customers of KCM told Fastmarkets that their copper deliveries for May have arrived on time and their June deliveries are not expected to be affected by the Zambian government’s recent liquidation order to the 310,000-tpy facility.

A court hearing between Vedanta and the Zambian government will be held on June 4.

No force majeure has been declared since the takeover attempt, which is a first for the government of Zambia.

Julian Luk

julian.luk@fastmarkets.com

Published

Julian Luk

May 31, 2019

17:25 GMT

London