Chile's Antofagasta settles copper concs TC with Jinchuan at $80/mt for 2024

Chilean miner Antofagasta settled copper concentrate treatment and refining charges (TC/RC) at $80/mt and 8 cents/lb, respectively, with Jinchuan Group -- a major Chinese copper smelter -- for 2024 term contracts on Nov. 17, the companies told S&P Global Commodity Insights on Nov. 20.

The first annual settlement between a major miner -- in recent years Freeport or Antofagasta -- and leading Chinese smelters in the fourth quarter tends to become the benchmark for the rest of the industry for the year ahead. No offer has been heard from Freeport for the 2024 benchmark yet.

The settled TC/RC between Antofagasta and Jinchuan Group was $8/mt or 0.8 cent/lb lower than the benchmark level for 2023 term contracts, marking the first decline since 2021, which indicated an expectation of tightening copper concentrates supply in 2024.

Some other smelters followed the price in deals with Antofagasta on Nov. 20, according to two market sources.

A major producer said they will follow $80/mt as the number is reasonable.

However, major Chinese smelters such as Jiangxi Copper, Tongling Nonferrous and China Copper haven't made a final decision on accepting the price, according to a smelter source.

"There is a high possibility that the rest of the Chinese leading smelters will follow the agreed number, based on past experience," said a Chinese source.

The settled price was higher than Antofagasta's offer heard on Nov. 15 at $72-$75/mt.

Chinese smelters were reluctant to accept TC/RC below $80/mt, as they held the view that copper concentrates supply would remain in surplus in 2024, while the growth of mining might be slower than the smelting capacity expansion.

The market was closely tracking the protests at Quantum's Cobre Panama mine and an export ban on Indonesian-origin copper concentrates from next May, though it hasn't seen any potential impact on copper concentrates supply for 2024 so far, some sources said.

Looking ahead, global copper concentrates supply might see shortages in 2025, as the expansion of refined copper smelting capacity is expected to be far greater than that of copper concentrate supply, sources said.

Meanwhile, despite the recent decline in copper concentrate TC/RC as well as by-product sulfuric acid prices, Chinese smelters have kept their passion for production so far on expectations that the profit margin may remain healthy.

Tradable values for December- and January-loading clean copper concs were heard around $80/mt from the trader to the smelter, and traders see it sliding further due to ongoing demand.

Platts assessed CIF China Clean Copper Concentrates treatment and refining charges at $78.10/mt and 7.81 cents/lb, respectively, Nov. 17, down $6/mt and 0.6 cent/lb on the month, S&P Global data showed.