HAMBURG (Reuters) – Charges to refine copper concentrate (ore) into metal should remain stable in 2021 as the copper industry has come through the coronavirus crisis well, a senior executive at Aurubis, Europe’s largest copper refiner, told Reuters on Wednesday.

    “Mines are working at high capacity and ever more concentrate is coming onto the market,” said Michael Hellemann, Aurubis’ senior vice president, commercial. “I think we are facing comfortable concentrate supplies in 2021.”

    Treatment and refining charges (TC/RCs), the cost of processing ore, are being discussed in the traditional year-end negotiations.

Miners pay TC/RCs to smelters to process their copper concentrate into refined metal and they are a key part of the earnings of smelters like Aurubis. Charges typically go down when concentrate supply is tight and smelters have to accept lower fees to get feedstock.

    “Overall the copper industry has come through the coronavirus crisis without the disruption seen in other sectors and in 2021 I expect abundant concentrate availability,” said Hellemann.

    “But there are a series of scheduled smelter maintenance shutdowns in 2021 which are expected to remove a significant amount of processing capacity from the market so mines will have to offer attractive TC/RCs to gain smelter capacity.”

    TC/RCs in 2020 are $62 per tonne/6.2 cents per pound, with recent forecasts of a fall to $60 a tonne.

But fourth quarter TC/RCs in China firmed.

    Premiums for copper products in 2021 are also set to be announced in coming weeks. In 2020, Aurubis gave a premium of $96 per tonne above London Metal Exchange (LME) prices.

    “Considering the current copper market situation, I am cautiously optimistic we will see little change in premiums in 2021,” Hellemann said. “The copper market is looking positive with the Chinese economy recovering. Aurubis is retaining its forecast for profits in this

Silver futures posted a third-quarter gain of 26%.


patrick hertzog/Agence France-Presse/Getty Images

Industrial metals posted gains in the third quarter, with silver up sharply and copper touching its highest prices in over two years, suggesting that the worst of the coronavirus hit to the economy may be over.

The third quarter economic backdrop was “very supportive of the overall commodity complex,” including industrial metals, says John Caruso , senior asset manager at RJO Futures. “The ‘reflation’ trade, assisted by the reopening of the economy and record [Federal Reserve] and government stimulus, helped the metals complex gain plenty of fervor” following the second quarter Covid-19-related shutdown and economic collapse.

On Sept. 30, silver futures
SIZ20,
-1.33%

posted a 26% climb for the third quarter and copper futures
HGZ20,
+3.83%

finished about 11% higher.

“Optimism around the reopening of the global economy, a continued rally in risk-on assets, improving global economic data, and the hopes of additional stimulus helped propel the upward movement in industrial metals,” says Ed Egilinsky, managing director, head of alternatives at Direxion. The recent moves in the metals “certainly support a narrative that the worst of the economic slowdown exacerbated by Covid-19 might be behind us.”

At the same time, however, news of President Donald Trump’s Covid-19 diagnosis on Oct. 2 also “adds to the narrative of the ongoing global susceptibility to this virus,” he says. There has already been a reemergence of cases in parts of the world that can “lead to a global slowdown and a ‘risk off’ sentiment,” adversely impacting industrial metals.

Silver’s quarterly performance was impressive, especially when compared to a more modest 5.3% rise in gold futures for the same period.

Silver “benefitted from both the industrial and investment side of its demand equation” during the quarter, says Maria Smirnova, senior portfolio manager

Silver bars


Joel Saget/AFP via Getty Images

Text size

Industrial metals posted gains in the third quarter, with silver up sharply and copper touching its highest prices in over two years, suggesting that the worst of the coronavirus hit to the economy may be over.

The third quarter economic backdrop was “very supportive of the overall commodity complex,” including industrial metals, says
John Caruso
, senior asset manager at RJO Futures. “The ‘reflation’ trade, assisted by the reopening of the economy and record [Federal Reserve] and government stimulus, helped the metals complex gain plenty of fervor” following the second quarter Covid-19-related shutdown and economic collapse.

On Sept. 30, silver futures posted a 26% climb for the third quarter and copper futures finished about 11% higher.

“Optimism around the reopening of the global economy, continued rally in risk-on assets, improving global economic data, and the hopes of additional stimulus helped propel the upward movement in industrial metals,” says Ed Egilinsky, managing director, head of alternatives at Direxion. The recent moves in the metals “certainly support a narrative that the worst of the economic slowdown exacerbated by Covid-19 might be behind us.”

The industrial metals had struggled earlier in the year as restrictions tied to coronavirus slowed industrial production and hurt supply and demand for the commodities, he says. The reduction in supply created in part by the shutdown in production ”will only go so far, as the demand side needs to continue to accelerate.”

Silver’s quarterly performance was impressive, especially when compared to a more modest 5.3% rise in gold futures for the same period.

Silver “benefitted from both the industrial and investment side of its demand equation” during the quarter, says Maria Smirnova, senior portfolio manager at Sprott Asset Management. Demand for the metal has been rebounding along with the