Antofagasta settles copper concs treatment charge with Jiangxi Copper at $21.25/mt for 2025 term contracts

Chilean miner Antofagasta settled 2025 copper concentrate treatment and refining charges at $21.25/mt and 2.125 cents/lb, respectively, with key Chinese copper smelter Jiangxi Copper, sources from both companies told S&P Global Commodity Insights Dec. 6.

The TC/RCs fall in line with market expectations, although smelters pegged them in a $30-$40/mt range, as they said selling below $40/mt would be at a loss.

The settlement was slightly lower than the midyear agreement between Antofagasta and Asian smelters at $23.25/mt and 2.325 cents/lb, also a 73% drop compared with 2024 term contract settlements.

The initial offer from Antofagasta to Chinese smelters was at $10/mt and 1 cent/lb for TC and RC, respectively, Nov. 11, and the offer increased to $16/mt in December, according to smelters.

"The time discussions took shows that the price ideas from buyers and sellers for 2025 term contracts were too far apart," a smelter source said.

Miners pay TC/RCs to smelters to turn ore into refined metal and the agreed rate plays a crucial role in determining profitability on both sides. TC/RCs tend to decline when the supply of copper concentrates tightens.

Other contractual buyers from China are likely to follow Antofagasta's $21.25/mt rate, but the market fears the reaction of Japanese smelters.

"They would not be happy with the number below $30/mt, and may declare holiday for some contracts," a source said.

Tight copper concentrates supply in 2024 has been pushing spot TC/RCs below $20/mt and 2 cents/lb, respectively, since March.

Increasing smelting capacity from China, Indonesia, India and the Democratic Republic of Congo are set to widen the deficit in copper concentrates market in 2025.

The global copper concentrate market deficit was forecast to reach 52,000 mt in 2024 and 848,000 mt in 2025, according to S&P Global's Copper Commodity Briefing report released late-October.

The market anticipates that 2025 benchmark negotiations will be challenging, as prices need to reflect fundamentals, while smelters struggle to maintain production at low levels for an extended period.

Most Asian smelters have a breakeven level in the range of $40-$60/mt for TC/RCs and they were struggling to come out with a production plan due to price uncertainties.

"Smelters may cut production significantly in 2025," a smelter source said.

Platts assessed CIF China Clean Copper Concentrates TC/RCs at $5.50/mt and 0.55 cent/lb, respectively, Dec. 5, Commodity Insights data showed.