China smelter group again withholds guidance on copper processing fee

China's top copper smelters opted not to set guidance for a key copper processing charge in the third quarter, sources said, for a second meeting in a row as the industry grapples with tight concentrate supply.

The smelters met days after U.S. President Donald Trump unveiled a tariff of 50% on copper imports from August 1, though the event was scheduled long before his off-the-cuff announcement.

Friday's decision came at a quarterly meeting of the China Smelters Purchase Team, a group of the 16 largest smelters supposed to adhere to the guidance in spot copper concentrate deals, said four sources with knowledge of the matter.

"It's hard to set a guidance right now," said one of the sources who was briefed the situation but was unwilling to disclose more details.

The sources sought anonymity as they were not authorised to speak to media.

Treatment and refining charges (TC/RCs) paid by miners to smelters to process ore into refined metal rise when supply is plentiful and fall when smelters are forced to compete for scarce material.

Supply is now so tight that spot charges are deeply negative, meaning that smelters pay miners.

By withholding guidance for a second quarter, smelters are tacitly acknowledging low prices without setting a precedent that could encourage even lower bids from miners.

Last month, smelters agreed on zero treatment and processing charges with Chilean miner Antofagasta ANTO during mid-year negotiations. Agreeing to process concentrate for no charge was seen as a win for smelters.

China's rapid expansion of smelting capacity and concentrate supply growth that was slower than expected has led to tightness in the supply of concentrate, forcing the closure of some overseas smelters.

But revenues from by-products such as gold, silver, sulfuric acid and rare elements helped smelters keep above water, stifling large-scale production cuts in China.

Global copper traders are now offering cargoes to Chinese smelters as they look to offload metal no longer able to reach the United States before the August 1 tariff deadline.