Latest news with #smelting
Reuters
8 hours ago
- Business
- Reuters
Glencore says Australia copper smelter unviable, asks for government help
MELBOURNE, June 20 (Reuters) - Glencore (GLEN.L), opens new tab has called its Mount Isa copper smelter unviable and is waiting to hear back on its requests for assistance from state and federal governments to keep the facility open amid tough global conditions, it said on Friday. The UK-listed miner has been sounding the alarm in local media about its Mount Isa smelting business in Queensland state as its related mining operations are set to close next month. It will then have to procure copper concentrate to process when excess global smelting capacity has pushed global processing fees to historic lows. "A combination of unprecedented smelting market conditions, high costs like energy, gas and labour, and a shortage of copper concentrates is currently making the Mount Isa copper smelter unviable," Glencore said in a statement. Glencore said it has approached both federal and Queensland state governments for support to keep the copper smelter and refinery operating. Several lawmakers visited the plant on Friday including Australia's industry and science minister, Tim Ayres, and Queensland resources minister, Dale Last. The state and federal governments have engaged extensively with Glencore to explore options for a viable path forward for the smelter, which is a critical asset for regional and state economies, the ministers said in a joint statement. "Any closure of the Mount Isa copper smelter would have a detrimental impact on Australia's sovereign capability and other facilities downstream that rely on the smelter," Ayres said in the statement, without giving any details on what options there might be to provide Glencore with any funding. Glencore said that it had put forward ideas for a "regional solution that would bridge the current economic gap and enable the smelter and refinery to continue operating." "We want to continue operating the smelter and refinery and look forward to hearing feedback from both federal and Queensland governments on a possible way forward,' said Troy Wilson, chief operating officer for Glencore's Australian metals business, in a statement.
Reuters
11 hours ago
- Business
- Reuters
Copper smelters are facing both market and pricing crises
LONDON, June 20 (Reuters) - Copper smelters are now so desperate to find raw material they are paying miners for converting their concentrates into refined metal. So-called treatment and refining charges (TCRC) should be a core revenue stream for copper smelters but spot charges have been negative since the start of the year and the mid-year negotiations have also kicked off with a negative number. Low treatment charges feed copper's perennial bull narrative of too little mine supply but the current implosion in processing fees is as much about too much demand from too many new smelters. The imbalance looks unsustainable, particularly if smelters accept a negative charge for the mid-year talks, which set the price for much higher volumes than the spot market. But equally unsustainable is the copper industry's preference for pricing concentrates on an annual or semi-annual basis. The good news for smelters is that spot treatment charges appear to have stopped falling. The bad news is that they have done no more than stabilise at $-45 per ton (TC) and -4.5 cents per lb (RC) level, according to Benchmark Mineral Intelligence. Smelters which chose to lock in tonnages over the full year are partly insulated but this year's benchmark terms of $21.5 per ton were also the lowest in at least 20 years. The mid-year negotiations look likely to generate a still lower outcome, although smelters will understandably balk at locking in a negative TCRC for contracts that could run into 2026. Smelters have a couple of financial life-lines in the form of valuable by-products such as gold and silver. They also produce sulphuric acid, which has been rising sharply in price in China thanks to demand from the phosphate fertilizer industry. But a copper smelter's main source of income should really be copper, which is clearly not the case right now. It's not as if mines haven't been increasing production. Global output rose by 2.1% in 2023, 2.8% in 2024 and by another 1.2% in the first quarter of this year, according to the International Copper Study Group. China's imports of copper concentrates have been running strong, hitting a new annual high of 28.2 million tons bulk weight last year and up 7.5% year-on-year in the first four months of 2025. It's just that too much Chinese smelting capacity has been brought on line too quickly with newcomers chasing down available tonnage. Scrap is an alternative feed for some but this is an increasingly competitive market and Chinese imports of copper recyclable material are no more than flat so far this year relative to 2024. The rapid scale-up of Chinese processing capacity is clear to see in the country's production of refined metal. May output jumped by almost 14% year-on-year, according to the National Bureau of Statistics. Local data provider Shanghai Metal Market estimates production so far this year has grown by 11% over 2024 levels. A couple of Western smelters have already closed under the margin squeeze. Glencore (GLEN.L), opens new tab placed its Pasar smelter in the Philippines on care and maintenance in February. Sinomine did the same with its Tsumeb plant in Namibia earlier this month. But Chinese operators are doubling down in what appears to be a last-man-standing strategy. The world's mines are not going to be able to lift collective output by the same margin as China has increased smelting capacity. And the stresses in the raw materials supply chain are only going to get worse as new smelters fire up in Indonesia, ending the country's role as a key concentrates supplier to Asian smelters. Something will have to give, particularly since Chinese copper demand is expected to cool due to a scaling-back of subsidies for the over-heated solar panel sector. But with Chinese smelters not blinking, it could take some time before the current supply-demand imbalance is corrected through more capacity closures. That means more stress also on the industry's price discovery process, which is still rooted in annual deals. There has been some movement towards quarterly pricing and even spot pricing but largely in China. This, as smelters are finding out, is a big problem if the annual price is a negative number. A negative mid-year deal sets an ominous precedent. Markets such as iron ore have moved away from annual benchmarks which couldn't capture spot price volatility or sudden shifts in supply dynamics. Even lithium, widely perceived as too bespoke a commodity for standardised futures trading, can now be hedged on a liquid CME contract. It may be time for copper smelters to have a fundamental rethink about how they price their role in the processing chain. Because right now they're quite literally giving money away to the miners. The opinions expressed here are those of the author, a columnist for Reuters
Bloomberg
2 days ago
- Business
- Bloomberg
The World's Most Profitable Nickel Plants Face Cost Challenge
A pioneering group of Indonesian nickel smelters with the world's lowest production costs has been hit by a jump in the price of a key raw material, crimping their profitability just as the market is saddled with a glut. The price of sulfur, a chemical used to produce acid, has more than tripled in price over the past year, driven by increased demand. That's a headache for producers in Indonesia that use high-pressure acid leaching, known as HPAL. The breakthrough technique enables the smelters to extract metal from low-grade ore with chemicals, avoiding the need for blast furnaces.
Bloomberg
2 days ago
- Business
- Bloomberg
Why Trump Is Fed Up With Powell
Plus: A copper smelter stands alone, and a new episode of the Elon, Inc. podcast. By Save The US Federal Reserve decided to keep interest rates where they are. Bloomberg News senior economics reporter Enda Curran explains why Donald Trump isn't happy. Plus: The challenge of reviving US copper production, how Microsoft is standing by its climate goals, and is MAMUWT (Musk Always Makes Up With Trump) really a thing? If this email was forwarded to you, click here to sign up. Programming note: This newsletter will be off Thursday for Juneteenth. See you again on Friday.
Bloomberg
2 days ago
- Business
- Bloomberg
The US Has More Copper Than China But No Way to Refine All of It
Freeport-McMoRan Inc.'s only US copper smelter—a hulking metal-processing facility at the edge of an old Arizona mining town—spits neon flames from its furnace like an industrial volcano. Here, hundreds of employees work around the clock to transform vats of concentrated molten metal into neat, purified slabs, which are then shipped to a refinery in El Paso, Texas, the next step on their cross-country journey to become coils for electric wiring. On a sweltering day in May, plant operators are decked out in heat suits and fire-resistant visors, transferring heaps of metallic powder into industrial-scale ovens with machines that look like soup ladles for giants. It's a rare example of entirely made-in-America copper, an almost extinct part of the supply chain that President Donald Trump is hell-bent on bringing back.
