Bullish sentiment has overtaken the copper market, with the bellwether metal hitting a fresh milestone on Thursday in New York with prices peaking at $4.60 a pound or $10,140 a tonne.
Amid all the euphoria, spare a thought for Australian copper miners though. The country’s copper producers have not been able to fully take advantage of a rally they helped create.
Relations between Canberra and Beijing hit a new low on Thursday, but copper became a casualty of the spat many months ago.
Unlike the iron ore market where the countries’ steel mills and iron ore miners are joined at the hip and Beijing holds less sway in the trade relationship, Australia counted as only China’s number five supplier of copper prior.
With imports at zero since the end of November under a ban that was never made official, as a swing supplier Australian producers can influence dynamics of the seaborne market and create headaches for Chinese smelters already dealing with historically low refining charges.
Treatment and refining charges (TC/RCs) paid by miners to smelters to process concentrate into refined metal rise when supply is ample and fall when smelters are forced to compete for scarce material. TC/RCs fell to a historically low level of just over $20 a tonne last month compared to more than $70 a tonne in June last year and spikes as high as $130 in the previous decade.
Wood Mackenzie research director Gillian Moncur said Thursday that Chinese smelters remain closed to concentrates from Australia, compared to a peak of 108,000 tonnes in June last year.
“We estimate that the annual volume impacted is around 1.0 Mtpa of copper concentrate, which is looking for homes in other Asia Pacific smelters.
“This has resulted in China looking for concentrates from elsewhere, at a time when the market was very tight due to weather related issues, deferring shipments and other factors.”
6 Comments
Jerry
Just hope we all get along it’s will be a better wold for us to live ,God Bless us all ,take care n stay safe everyone cheers.
Tomsayer
That never will be until we stop being hypocrite and always consider what will be if we are in their shoe mentality. Our politicians will never set aside idealism supremacy onto others..
Rick DeConto
Let this be an example not to piss off the buyer of your product
Tomsayer
Not about piss off but rather stab the back of your greatest client again take what has to offer over the head for granted.
David Collier
I was going to comment, but having read previous comments it’s probably a waste of time
Frik Els
Never a waste of time to comment on MINING.COM – ed.