Metal Bulletin - By Kiki Kang
Shanghai 29/09/2016 - The China Smelters Purchasing Team (CSPT) has set a price floor for the fourth quarter of 2016 at $105 per tonne/10.5 cents per lb compared with $103/10.3 cents in the third quarter, sources told Metal Bulletin.
The price floor was set during a quarterly meeting on September 29 in Shanghai, at which each of its members reported their stock levels, tonnages under term contracts and their future production plans.
The target price is within market expectations and is line with terms seen in the spot market, which has been hovering above $100/10 cents since June. The Metal Bulletin Copper Concentrate Index was calculated at $102.4/10.24 cents on September 15 - trade sellers reported moderate buying interest in China and smelters reported strong overall availability despite some disruptions to shipments from South America.
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.
Benchmark TC/RCs fell to $97.35 per dry metric tonne/9.735 cents per lb in 2016 from $107/10.7 cents a year earlier but many market participants expect terms to rise above $100/10 cents again in 2017.
Metal Bulletin, the global metals and mining price reporting agency, recently acquired 100 percent of the shares of FastMarkets Ltd.