According to Mining News Pro -
* TC/RC benchmark to drop below $80/T in 2019 -Antaike
analyst
* Copper smelting capacity in China seen growing by 950kt in
2019
* China`s copper concentrate market now in deficit -Antaike
By Tom Daly
XINING, China, Sept 7 (Reuters) - Treatment and refining
charges (TC/RCs) paid to China`s copper smelters are set to drop
below $80 a tonne next year as processing capacity expands and
copper concentrate falls into a deficit, an influential Chinese
research house said on Friday.
Copper miners pay the charges to smelters to process ore
into refined metal, offsetting what the smelters pay for copper
concentrate. An annual benchmark agreed by both sides towards
the end of each year plays a large part in determining the
profitability of global copper miners and smelters.
Rapid growth in Chinese smelting capacity will lead to "more
intense competition for raw materials" in 2019, said Yang
Changhua, principal analyst at Antaike, the research arm of the
China Nonferrous Metals Industry Association, in a market
forecast at the China International Copper Forum in Xining.
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The 2019 benchmark will likely be "below $80," Yang told
Reuters on the sidelines of the conference.
The 2018 TC/RC benchmarks were set at $82.25 per tonne and
8.225 cents per pound, respectively. The charges typically fall
when the copper concentrate market tightens.
Antaike forecasts that annual copper smelting capacity in
China, the world`s biggest copper consumer, will increase by
950,000 tonnes in 2019, on top of an expected 1.08 million
tonnes of additions this year.
"The output of (China`s) copper mines is weak, and the
supply of scrap copper will be further tightened," Yang said,
increasing dependence on concentrate imports and leading to a
"downward trend" in TC/RCs. Overseas copper mine output will
increase slightly, he said.
The world`s largest copper mine, Escondida in Chile,
recently avoided a labour strike and a potential outage.
Freeport-McMoRan Inc in July, however, said a revised
development plan at the second-biggest deposit, Grasberg in
Indonesia, would reduce copper production during a transition to
underground mining in 2019 and 2020. A source at a major Chinese smelter dismissed the Antaike
forecast, saying a conclusion drawn by an institution or
research house would not change fundamentals.
"Let the market talk," the smelter source said, putting
current spot TCs at over $90 a tonne. He declined to be
identified as he was not authorised to speak to the media.
Antaike forecasts China`s concentrate imports will rise by
9.2 percent next year to 5.22 million tonnes of metal
equivalent. Its copper concentrate market is seen flipping to a
deficit of 12,000 tonnes this year and a deficit of 10,000
tonnes in 2019, from a 173,000 tonne surplus in 2017.
China`s refined copper demand growth will be at 3 percent
next year, down from 3.1 percent in 2018, Antaike says.
(Reporting by Tom Daly; Editing by Tom Hogue)