NEWSBREAK: Chinese copper smelters see Q3 TCs at $90/t but do not set official price floor – sources

The China Smelters Purchase Team (CSPT) agreed during a meeting in Manzhouli, Inner Mongolia, to discuss the minimum levels for TCs from July to September, a source with direct knowledge of the matter said.

“We are currently seeing the market TC terms at above $90 per tonne. You may interpret that it is the market price and our purchase will be made at the market price,” the major smelter source said.

This is the first time in over 15 years the CSPT has not setting a base level officially, the source said.

“This decision [to not set a floor] is made amongst all the top management of the smelters. I actually think that the CSPT will resume official announcements in the future,” a second smelter source familiar with the matter said.

The group set the treatment and refining charge (TC/RC) price floor for the second quarter of 2018 at $78 per tonne and $0.078 per lb.

The 2018 annual TC/RCs benchmark is $82.25/8.225 cents, agreed last year between copper producer Freeport and smelter Tongling Nonferrous, which took the lead in annual negotiations for the first time.

As well as Tongling, the CSPT members are Jiangxi Copper, Daye Nonferrous, China Gold, Baiyin Nonferrous, Gansu Jinchuan, Yunnan Copper, Zhongtiaoshan, Yantai Guorun and Zijin Mining. 

Spot copper concentrate TC/RCs jumped up sharply in the first half of June after smelters overcame resistance from traders and miners to sell at higher levels.

Metal Bulletin’s copper concentrates index shot up by $5.40 per tonne/0.54 cents per lb over the past two weeks to $77/7.7 cents on Friday June 15 – its highest level since January, when the index normalization method was adjusted to include a counterparty factor.