Platts decides to launch daily copper concentrate CIF China assessments

Following market feedback, S&P Global Platts has decided to launch daily Clean Copper Concentrate spot price assessments on a CIF China basis, from Feb 1, 2021.

The new assessments will be an outright price, treatment and refining charges (TC/RC) and price differentials to the outright price for three major brands.

Platts originally published the proposal on Dec. 23, and the relevant note can be found at:

http://plts.co/S6an30rukqu

The Platts CCC assessments will reflect spot market value of generic clean copper concentrate of any origin at 4:30 pm Singapore time, expressed as TC/RC values and as an all-in value.

The all-in price will be calculated using assessed TC/RCs and copper, gold and silver futures prices at 4:30 pm Singapore time for the relevant months.

The assessments will consider trade, bid, offer and indicative price information reported to Platts and published throughout the day, as well as any other data deemed relevant to the assessment process.

A full description of Platts price assessment methodology and data hierarchy can be found at:

https://www.spglobal.com/platts/plattscontent/_assets/_files/en/our-methodology/methodology-specifications/platts-assessments-methodology-guide.pdf

Platts CCC CIF China specifications:

Unit price: TC/RC US$ per mt and cents per pound

Volume: Minimum 5,000 mt

Payment Terms: Letter of credit at sight

Timing: Loading 1-3 months forward

Copper futures quotation period: M+3, with M being the middle month of the three-month loading period

Platts originally proposed a timing specification reflecting deliveries 2-4 months forward.

Following market feedback, Platts has decided on a timing specification reflecting cargoes loading 1-3 months forward.

Accordingly, the assessment will reflect a quotation period of M+3, with M being the middle month of the three-month loading period.

For example, the assessment by Platts from Feb. 1-28 will reflect cargoes loading March to May.

During this period, the middle month of the loading window will be April, meaning that the standard QP month applied will be July.

When the assessment date rolls into the next month on March 1, Platts assessments will start reflecting cargoes loading in April, May and June, against an August QP.

Trade information based on different QPs will be normalized to the stated standard, based on intermonth futures spreads.

Platts assessments will also consider price variances due to loading timing.

Where a structure is observed in the physical spot market, any price different observed as a result of will be normalized to the middle of the standard 1-3 month forward window.

Calculation and normalization:

Quality specifications are an integral and important part of the value of each brand and cargo of copper concentrate.

Platts will monitor the specifications and value of all relevant brands of copper concentrate for pricing consistency on an ongoing basis.

Beyond copper, gold and silver content, Platts assessment may take into account normalizations for any chemical or physical characteristics that have a meaningful impact on price, including but not limited to arsenic, fluorine, mercury, lead and zinc content.

Where the market value for a particular brand of concentrate is found to depart from the value implied by its quality, Platts will prioritize observed brand values over any theoretical calculations based on quality specifications.

In order to bring further transparency and consistency to its assessment process, Platts will use the below standard payables scale when normalizing for copper, gold and silver content.

The scale reflects the current most common standard applied for spot market imports into China.

Pricing information reflecting different scales will be normalized to this standard.

Additional premiums may be applied when normalizing for gold content above 5 g/mt or silver above 200 g/mt.

Platts may seek to normalize to a base standard any contract terms which may have meaningful impact on the TC value, including for example divergent quality assay results and moisture levels at discharge ports, and continues to welcome feedback on how to best to manage this.

Brands assessments:

Alongside its benchmark CCC Clean Copper Concentrate assessment, Platts will assess daily differentials for Los Pelambres, Los Bronces and Escondida.

Specifications, overall production volume and spot liquidity, as well as general resonance in the market were factors in the selection of these headline brands.

These assessments will provide a comparative framework for Platts Clean Copper Concentrate assessment.

The brand prices will be calculated according to typical specifications, in line with the payable scales listed above, copper, gold and silver futures prices for the respective QP.

Platts may also refer to actual specifications of transacted cargoes as the basis of calculation, should they depart materially from typical specifications.

Market participants are invited to send feedback to pricegroup@spglobal.com and platts_asia_copper@spglobal.com.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing.

Platts will consider all comments received and will make comments not marked as confidential available upon request.