Miners pay TC/RCs to smelters to process copper concentrate into refined metal, offsetting the cost of the ore. The charges tend to fall when supply tightens and rise when more concentrate is available.
The charges in the first quarter were a five-year high and reflected market expectations of a supply glut this year. But recent disruptions in some key producing regions raised concerns about near-term shipments to China, the world's top copper consumer.
Peru, the world's no. 2 copper producer, has been roiled by demonstrations since late last year, with road blockades restricting transport to and from key mines and some attacks on mine sites by protesters. Canadian miner First Quantum Minerals suspended ore processing operations at a key Panamanian copper mine in late February after a government order halted port loadings, limiting its capacity to store copper.
Operations resumed in mid-March after an agreement was reached.
In February, heavy rain and mudflows in Indonesia forced copper miner Freeport Indonesia to halt its mining and processing activities.
"The logistics hurdles seen in February could affect copper shipments into China in April and May. And disruptions in the mining side has yet to be fully recovered," said one of the sources, who attended the meeting on Thursday. "But still we expect supply to be sufficient." Smelter consumption is expected to rise in the second quarter, a traditionally strong demand season, and as metal usage recovers after China lifted last year's stringent COVID curbs.
China's refined copper production rose 10.6% in the first two months of 2023 compared with a year ago to 1.95 million tonnes, data from the National Bureau of Statistics showed.
The latest charges are higher than the 2023 TC/RCs benchmark
that was settled at $88 a tonne and 8.8 cents per pound by miner
Freeport-McMoRan and Chinese smelters.
(Reporting by Siyi Liu and Andrew Hayley; Editing by Jacqueline
Wong and Jamie Freed)
