Adjustment in TC/RCs
China’s leading copper smelters have revised their first-quarter guidance for copper concentrate processing treatment and refining charges (TC/RCs), signaling a decrease due to tightening supply conditions. The new rates, set by the China Smelters Purchase Team (CSPT) at their recent meeting, stand at $80 per metric ton and 8 cents per pound. This represents a 16% decrease from the fourth-quarter guidance of $95 per ton and 9.5 cents per pound, which was a six-year high.
Lowest Rate Since Q3 2022
The newly established rate matches the lowest since the third quarter of 2022 and aligns with the 2024 annual benchmark of $80 per ton/8 cents per pound, previously agreed upon by major Chinese smelters and global miners.
TC/RCs Dynamics
TC/RCs, the fees miners pay to smelters for processing copper concentrate into refined metal, are inversely related to supply availability. The recent reduction in TC/RCs indicates a tightening supply of copper concentrate.
Factors Influencing Supply Outlook
Key factors contributing to the constrained supply outlook include the closure of First Quantum’s Cobre mine in Panama and Anglo American’s reduced copper production guidance for 2024. Research firm CRU forecasts a deficit of around 170,000 tons in the global copper ore and concentrate market for 2024, expecting the Cobre mine, which contributes 1.9% to global supply, to remain closed until May.
China’s Dependence and Import Data
China’s reliance on overseas copper ore supplies is significant, with domestic smelters having increased production to record highs this year. Data from January to November shows a year-on-year growth of 8.4% in total copper ore and concentrate imports, amounting to 25.07 million tons. Panama alone contributed 629,773 tons during the first 11 months of the year.
Market Reaction
The tightened supply is reflected in the spot TCs assessed by Shanghai Metals Market, which fell below $68 per ton. 
