Trafigura blends copper concentrates in temporary Malaysian operation

Swiss trading house Trafigura has begun blending copper concentrates in Malaysia, with small batches of output being offered to the market, Fastmarkets has learned.

The size of the blending operations is said to be small, non-arsenic related and operated from a rented warehouse network. Trafigura regards the operation as temporary, sources with knowledge of the matter said.

Malaysian blends with high-grade copper content and some precious metals were offered to customers in China, according to specification documents seen by Fastmarkets.

An industry source, familiar with the operation, said it is expected to run until October at the latest, with monthly blending capacity eventually ramping up to a range of 5,000-10,000 tonnes per month.

Trafigura already has extensive copper concentrate blending operations in Callao, Huelva, and Manzanillo; however, this temporary blending facility in Malaysia has been set up because other traders are flexing their logistics to blend concentrates in areas closer to East Asian smelters.

The company declined to comment when approached by Fastmarkets.

Glencore has already started to build its own facility in Taichung City, Taiwan, which is also where Ocean Partners operates a plant. Other traders blend copper concentrates in South Korea.

Copper concentrates blending, whereby different types of concentrates are mixed to form an ideal chemical specification, is however, not yet a well-developed business in Malaysia.

Daye Nonferrous rented a warehouse in Port Klang for copper concentrates blending in 2016, but multiple sources stated that it has left the operation, which has now been converted into an aluminium storage warehouse by Access World.

Traditionally, blending either takes place at ports near smelters or at sites close to where a multitude of different concentrates are mined. Although Malaysia lacks copper producing sites, nearby Indonesia, Cambodia, Laos and Myanmar have operating mines.

It is an interesting time for the blending business currently after China proposed in early August to implement a stricter arsenic threshold on copper concentrates imports.

If made law, this move could lead to drastic changes in global trade flows of high-impurity concentrates and a further premium on treatment charges of clean concentrates.

Under the proposed thresholds, the maximum content for imports will be 0.4% arsenic, 4.7% lead, 0.06% fluorine, 0.03% cadmium, and 0.002% mercury, according to papers seen by Fastmarkets.

Two new elements have been added to import regulations: the combined content of antimony and bismuth cannot be higher than 0.2%, while thallium content is capped at 0.005%.

These additions mean that more copper concentrates will have to be blended before matching the imports threshold of China, which is home to over half of the world’s copper smelting capacity.

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