Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Copper refinement and treatment charges (RC/TC) in China’s smelters, may fall below their first-quarter minimum charges of $53/mt due to an oversupplied market and maintenance-related shutdowns. 


This is only the third time in recent history that smelters have established that a floor would be unachievable, according to media reports that attributed the decision to a meeting of the China Smelters Purchase Team (CSPT), a group of buyers from top Chinese smelters that establishes a minimum price for RC/TC.


The group established that a floor would be unachievable in the second quarter due to the increased supply of concentrate in recent months per reports, which also noted that around 2mn mt of copper smelting capacity will undergo maintenance in Q2 2021, cutting refined production by around 200,000mt. 


Buyers have indicated that they have bought enough concentrate for stockpiling, which has sent treatment charges spiraling down even though supply from mines remains limited. Freeport had initially set the benchmark at $53/mt, but the current market rates for RC/TCs are reported at around $30/mt. 

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