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

China’s top 10 copper smelters have decided to cut copper production as treatment and refining charges (TC/RCs) for concentrates dipped to seven-year lows in the last quarter of 2019. 


China Smelters Purchase Team (CSPT) representing 10 top copper smelters, who account for 70pc of China’s copper production, decided to cut output in their quarterly meeting on Thursday. The group fixed TC/RC rates for the first quarter of 2020 at $67/mt, 31.44pc lower than $92/mt in the first quarter of 2019. The charges are up by 1.5pc from $66/mt in the fourth quarter of 2019. TC/RC rates are the fees charged by smelters for processing mined concentrate into refined metal.


China leads global copper consumption. The country built surplus smelting capacity in the last decade to reduce copper imports but is struggling with shortage of raw material and lower profit margins. TC/RCs rates have dipped as many copper smelters are chasing limited mine supplies causing smelter margins to come under pressure.


In the Jan-Sept period, China’s apparent usage of copper grew by around 2.8pc from the prior year as a consequence of higher refinery output from China, according to the International Copper Study Group (ICSG) December report. Outside China, global usage declined by 2pc. 


Globally, refined copper production remained essentially unchanged with primary production down by 0.4pc and secondary copper production up by 1.6pc. Preliminary world refined copper for Jan-Sept period indicates a deficit of about 390,000mt.

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