Copper’s properties as a corrosion-resistant, extremely malleable high conductor of electricity have made its use in different industries irreplaceable. Sources reveal that major copper smelters in China agreed to lower processing treatment and refining charges for Q1 2025.
This move hints at a looming shortage of copper concentrates due to a decrease in the availability or production of copper ore as ore grades continue to decline and demand increases. This argument is supported by the increased price of the red metal on the London Metal Exchange, which rose to $8988 per ton after a 5-week low.
During a China Smelters Purchase Team meeting held in Shanghai, smelter representatives agreed to have the charges brought down to 2.5 cents per pound and $25 a ton. These figures are over 28% lower compared to the Q4 guidance, which stood at 3.5 cents per pound and $35 per ton.
A primary source of revenue for smelters, TC/RCs, serve as an indicator of the supply of copper concentrates. The charges usually increase when the supply of copper concentrate increases and fall when the supply of ore drops.
In a note, analysts at Galaxy Futures stated that it was normal for the red metal’s price to fluctuate as year-end approached. The analysts argued that this could be because spot trades were thin and many firms were working to close their books.
It should be noted though that guidance rates were higher than the 2025 benchmark price set by major smelters in China and Antofagasta, of 2.125 cents per pound and $21.25 per metric ton.
Antofagasta is one of the major global producers of copper. The firm’s activities are concentrated in Chile, where it now runs 4 copper mines, its flagship operation being the Los Pelambres mine found in the Coquimbo region. The company’s other mines include the Centinela, Zaldivar, and Antucoya.
When asked about spot copper cargoes, most attendees revealed they had enough supply, which means the demand in 2025 may not be as high.
In other news, copper inventories at Shanghai Futures Exchange rose 4.7%. Despite the increase, it was the lowest level in months. Regarding the performance of other metals on the Shanghai Futures Exchange, tin recorded an increase in its price while the prices of lead, nickel and aluminum dropped. Zinc’s price remained unchanged.
On the London Metal Exchange, lead and aluminum recorded decreases during the period while zinc, tin and nickel saw their prices surge.
If copper ores continue to dwindle at the current pace, exploration companies like Torr Metals Inc. (TSX.V: TMET) are set to register substantial value gains if the regions they are focusing on yield economically viable deposits of copper in the coming years.
NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET
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