A year of unprecedented copper smelter disruptions has put copper concentrate benchmark negotiations on the front foot, with miners and smelters closer than usual in bid and offered terms at the outset of discussions.
Major outages at key smelters, including Sterlite Copper's Tuticorin, Glencore's Pasar and Codelco's Chuquicamata have pushed up spot treatment and refining charges (TC/RCs) and driven uncertainty over next year's demand outlook for copper concentrates. This is despite increasingly bullish fundamentals for TC/RCs, which are expected to sink once scheduled Chinese smelting capacity comes on-stream in the second half of 2019. And with this shrouded view of the future indicating the first half of the year will be well supplied, tightening in the second half, miners and smelters are more likely to seal deals at levels close to this year's $82.25 per tonne / 8.225 cents per lb benchmark than longer-term fundamentals would suggest. The China's Smelter Purchase Team (CSPT) group of smelters have set out their stall at $90/9 cents while miners have opened discussions in the $70s / 7 cents. The gap is considerably smaller than in previous years and an agreement...