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Aurubis forecasts higher copper treatment and refining charges
February 3, 2017 / 5:41 PM / 10 months ago

Aurubis forecasts higher copper treatment and refining charges

HAMBURG, Feb 3 (Reuters) - Global spot copper concentrate (ore) treatment and refining charges started 2017 strongly, Europe’s biggest copper smelter Aurubis said, forecasting this should continue.

Individual contracts in treatment and refining charges (TC/RCs) of around $92.5 a tonne and 9.25 cents a lb reported in January were around the benchmark for 2017 so far, Aurubis said on Friday.

“However, even TC/RCs of around $100 tonnes and 10 cents a lb seem to be within reach in the meantime,” Aurubis said.

Traders had put TC/RCs, which are paid by miners to smelters to refine concentrate into metal and are a key part of the global copper industry’s earnings, at around $86 a tonne at the beginning of the year.

“On the international copper concentrate market, Chinese and Japanese smelters seem to have concluded their inventory build-up,” Aurubis said in a note.

“This build-up had led to higher demand and falling TC/RCs before Christmas. Buying interest decreased on the spot market in January and more concentrates were available again.”

When mine production is high or when purchase interest from smelters is thin, mines and other concentrate owners have to compete to gain smelter capacity and so TC/RCs are firm.

The immediate trend in TC/RCs will depend on several factors including whether workers at BHP Billiton’s < BHP.AX> Chilean mine Escondida start a threatened strike, Aurubis said.

Other factors include what buying patterns Chinese concentrate smelters adopt after the end of the Lunar New Year’s festivities in the coming days and whether Indonesia will permit concentrate exports. (Reporting by Michael Hogan; Editing by Alexander Smith)

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