UPDATE - CSPT smelters 'book deals' at $101-103 TC despite setting $105 floor

Ian Walkerian.walker@fastmarkets.comPhysicals Reporter+44 (0) 20 7337 2145

London 29/09/2016 - Several members of the China Smelters Purchasing Team (CSPT) have reportedly concluded deals for fourth-quarter shipments of copper concentrates below the 'floor' set by the group on Thursday at $105, traders with direct knowledge have told FastMarkets.

The price floor was set during a quarterly meeting on September 29 in Shanghai, at which each member reported its stock levels, tonnages under term contracts and their future production plans.

But the smelters have reportedly booked tonnages on Thursday with trading houses for delivery in the fourth quarter below the fourth-quarter floor at $105 and the nominal third-quarter minimum of $103.

Deals have been signed at between $101 and $103 per tonne/10.1 cents and 10.3 cents per pound, with just one full business day remaining before the start of the fourth quarter. Four sources independently confirmed to FastMarkets and Metal Bulletin that they had either concluded or were negotiating deals at the quoted figures.

Average global TC/RCs - the fees paid to smelters to cover the cost of turning concentrate into refined copper - were last assessed at $99-104 per tonne/9.9-10.4 cents per pound. In trades to smelters, spot TC/RCs were last assessed at $102-106/10.2-10.6 cents.

CSPT represents China's largest copper smelters - Jiangxi Copper, Zijin Copper Tongling Nonferrous, Yunnan Copper, Jinchuan, Daye Nonferrous, China Gold, Baiyin Nonferrous, Zhongtiaoshan, Yantai Guorun and Yantai Penghui.

Ahead of the fourth quarter, smelters are also preparing for annual discussions for benchmark for treatment and refining charges (TC/RCs), which usually kick off during LME Week in London.

Since purchase volumes in the fourth quarter will be lower than the previous quarter, the price floor is more like an indicator of the CSPT's target for the 2017 benchmark, market participants suggested.

(Additional reporting by Metal Bulletin's Kiki Kang, editing by Mark Shaw)

Metal Bulletin, the global metals and mining price reporting agency, recently acquired 100 percent of the shares of FastMarkets Ltd.

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