China Minmetals has started production of copper cathodes at its 100,000-tonne-per-year Shuikoushan smelter in Hunan province, FastMarkets understands.
“They started feeding the smelter a few days ago, at the beginning of this week,” a source in China said.
The smelter, which will operate with a Shui kou shan (SKS) oxygen bottom-blown furnace, will consume roughly 270,000 tonnes per year of copper concentrates at full capacity.
It is currently unclear how long the smelter will take to ramp up to full capacity but market sources suggested that it could be a smooth run because Minmetals and Shuikoushan developed the smelting technology being used.
Minmetals, which also owns the newly operating Las Bambas copper mine in Peru, is not expected to divert tonnages from the mine. Iinstead, it will bring in material from the wider market.
“They will not send a lot of Las Bambas [material] to Shuikoushan – because of the high grade it’s not really suitable for it,” the source said.
Shuikoushan’s start comes as TC/RCs for copper concentrate – the discounts on the copper price paid to smelters – are firming to around the 2016 benchmark of $97.35 per tonne/9.735 cents per pound in deals between smelters and traders or mines.
Terms slumped in the first quarter after extended annual benchmark negotiations but have since risen steadily while considerable tonnages are offered in the market.
(Editing by Mark Shaw)