Copper: China spot TC/RCs fall to $84-$92/mt; 2018 term talks deadlocked -- sources

Hong Kong (Platts)--5 Dec 2017 549 am EST/1049 GMT

Spot treatment and refining charges for Chinese smelters were at $84-$92/mt and 8.4-9.2 cents/lb last week, edging down from $85-$93/mt and 8.5-9.3 cents/lb the previous week, with thin imported concentrate trade amid annual term TC/RC talks, industry sources in China said Tuesday.

Both Tongling Nonferrous Metals and Jiangxi Copper said in their December copper sector reports that the Chinese smelting sector and overseas mines could not finalize term TC/RCs for 2018 due to diverse views on next year's market fundamentals.

Jiangxi Copper said annual term TC/RCs in past years had been agreed around year-end, but the two sides have reached a stalemate this year because their views on supply and demand of mined copper next year are divergent. Key Chinese smelters have ample stocks of concentrate, so are not doing much buying, it said.

Tongling Nonferrous said that due to the lack of agreement, term TC/RC talks for next year are expected to continue into early 2018.

Base metals and commodities platform owner China Construction Bank in its December copper report said the ongoing talks have led to thin buying of spot imported copper by China. Heightened concerns about mined copper supply risks, with strikes at mines in Chile and Peru, as well as increased copper prices have also hindered the talks, it said.

TC/RCs, fees paid to smelters by mines to convert concentrate into refined copper, are a key source of revenue for smelters.

China imported 1.37 million mt of copper ores and concentrates in October, down 100,000 mt month on month, but up 0.74% year on year. Over January-October, ore and concentrate imports rose 2.9% year on year to 13.93 million mt, data from the General Administration of Customs showed.

China's mined copper demand is forecast to be 6.15 million in 2018, up 6% from an estimated 5.8 million mt this year, estimates by state-run metals consultancy Beijing Antaike showed.

China's net mined copper imports (25% metal contained in ores) are forecast to be 4.8 million mt next year, up 6.7% from an estimated 4.5 million mt this year, with domestic mined copper output seen at 1.72 million mt next year, up 4.2% from an estimated 1.65 million mt this year, the agency said.

--Joshua Leung,

--Edited by Jonathan Fox,

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