Platts launches daily copper concentrate CIF China assessments, including three major brands' differentials

S&P Global Platts has launched daily Clean Copper Concentrate spot price assessments on a CIF China basis, from Feb. 1, 2021. The new assessments are an outright price, treatment and refining charges (TC/RC) and price differentials to the outright price for three major brands.

Platts originally published a proposal on Dec. 23, 2020, with the relevant note found here: http://plts.co/S6an30rukqu, and made a decision on Jan. 27, 2021, which can be found here: http://plts.co/URG130ruZt6

The Platts CCC assessments reflect spot market value of generic clean copper concentrate of any origin at 4:30 pm Singapore time (0830 GMT), expressed as a TC/RC value and as an all-in value. The all-in price is calculated using assessed TC/RCs and copper, gold and silver futures prices at 4:30 pm Singapore time for the relevant months. The assessments 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 here:

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 dollars per metric ton and US 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 3-month loading period

Platts timing specification reflects cargoes loading 1-3 months forward. Accordingly, the assessment reflects a quotation period of M+3, with M being the middle month of the three-month loading period.

For example, over Feb. 1-28, 2021, Platts assessment will reflect cargoes loading March 2021 to May 2021. During this period, the middle month of the loading window will be April 2021, meaning that the standard QP month applied will be July 2021. When the assessment date rolls into the next month on March 1, Platts assessments will start reflecting cargoes loading in April, May and June, 2021, against an August 2021 QP.

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

Platts assessments also consider price variances due to loading timing. Where a structure is observed in the physical spot market, any price difference observed as a result of that 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 prioritizes observed brand values over any theoretical calculations based on quality specifications.

In order to bring further transparency and consistency to its assessment process, Platts uses 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 is 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 has launched differentials for Los Pelambres, Los Bronces and Escondida, assessed daily. 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 provide a comparative framework for Platts Clean Copper Concentrate assessment. The brand prices are 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.

The new assessments are published in Platts Metals Daily, on the fixed pages PMA0304 and MTL0304 of the Platts real-time alerts and in the Platts database under the above-mentioned codes.

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