Affected by the epidemic, domestic copper concentrate processing fees have reached a new high

Spot charges for processing copper concentrates in China have risen to their highest level
in eight months as the coronavirus outbreak and related production and logistics restrictions have prevented smelters from shipping.

On Monday, the processing and refining fees (TC/RCs) paid by miners to smelters to process copper ore into refined metal AM-CN-CUCONC climbed to $62.
50 per ton and 6.
25 cents per pound, according to assessments by industry pricing and information providers.

Much of China resumed work on the day after the Lunar New Year holiday was extended, up $1 from the past month's TC level of $61.
50 and the highest assessment
since June 10, 2019.

Smelters in China, the world's largest copper consumer, needed less concentrate after the coronavirus outbreak because plant shutdowns and shipping restrictions meant they couldn't unload large amounts of sulfuric acid, a byproduct, which limited their ability to
produce more copper.

Fees increase when copper concentrate is more abundant in supply, while they decrease
when the market tightens.
Given smelter capacity rampups and limited mine supply growth, the 2020 annual TC/RC benchmark price for mine smelters was $62 per ton and 6.
2 cents per pound, the lowest
in nine years.

"Some smelters may cut production
due to high sulphuric acid stocks.
TC may rise
further.
A Chinese trader said
.

The southwestern country of Guangxi in southwest China declared force majeure on the shipment of copper concentrate last week
, sources told Reuters.
Daye Nonferrous Metals, a major copper smelter in Hubei province, the epicenter of the virus, has not declared force majeure, but delivery dates for certain concentrate supplies have been delayed
, company officials said.
Daye did not immediately respond to a request for
comment.

Yao Wenyu, senior commodity strategist at ING London, said: "The short-term increase in processing fees may be related to
the tightening of smelter profits and the operating difficulties caused by the recent force majeure.
”

Daye officials said the company relies on miners and traders to distribute its supply of copper concentrate, which comes mainly from South America
, in a 50-to-50 ratio.
He declined to provide further details about the delays or to disclose the smelter's current operating rate
.
Due to the outbreak, nearly 1,000 Daye employees had to self-isolate at home, while two employees contracted the virus
.