BC mining groups reject permitting delays, economic benefits study
MABC CEO Michael Goehring called the study’s methodology unsound and its conclusions deceiving.
China’s biggest copper smelters have decided to not set a floor price for second-quarter treatment and refining charges (TC/RCs) for the second straight year, said three sources with knowledge of the matter.
TC/RCs are an important source of revenue for smelters and are paid by miners when they sell concentrate, or semi-processed ore, to be refined into metal. The charges typically go down when the concentrate market tightens and smelters have to accept lower terms to secure feedstock.
The state-backed members of the China Smelters Purchase Team (CSPT), including Jiangxi Copper, Jinchuan Group and Tongling Nonferrous, set the floor price periodically and are supposed to adhere to them in any spot copper concentrate deals.
“It’s hard to set a number in the current market,” said one of the sources who attended the CSPT meeting in Shanghai on Friday. The source said a floor price was difficult to set because of smelter maintenance in the second quarter, tighter supply of copper concentrates and a low spot TC/RC market.
The group did not set a floor price in the second quarter of last year too.
“We have purchased enough copper concentrate. We have bought all the demand (we need),” said another source.
The CSPT office said it has no comment. The sources declined to be named as the meeting – the first CSPT gathering under the leadership of China Copper Co Ltd raw materials head Frank Feng – was private.
Spot TC/RCs in top copper consumer China, as assessed by Asian Metal , have fallen to their lowest in more than 10 years at $33.50 a tonne and 3.35 cents per lb, after shipments from Chile were disrupted early this year and Chinese smelters limited their supply sources by snubbing Australian concentrate.
Ahead of the meeting, traders were picking up South American concentrate at TCs under $20 per tonne, Reuters reported last week, although a source close to the CSPT said at the time Chinese smelters would not accept anything below $30. .
The annual benchmark TC/RC for 2021, used in term supply contracts, was $59.50 a tonne and 5.95 cents per lb, while CSPT set its floor price for the first quarter at $53 per tonne and 5.3 cents per lb.
(By Emily Chow, Shivani Singh, Tom Daly and Mai Nguyen; Editing by Muralikumar Anantharaman)
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