As we all know, China's copper needs rely heavily on imports, foreign dependence is high, so let's first look at how the production cost of imported domestic copper is calculated.
Generally speaking, the calculation of the production cost of imported copper to first calculate the cost of copper imports, copper import cost refers to the domestic copper smelting enterprises to import the cost of copper concentrate, it is calculated, in simple terms, is to use the LME price minus the price of the contract negotiated copper comprehensive smelting fees, and the domestic copper production cost, is based on the cost of imports and then added to domestic smelting costs.
Considering the exchange rate, the domestic copper production cost can be expressed by the following formula:
Copper production cost = (LME spot average price - TC / RC) × exchange rate + domestic smelting costs
There are three points to be explained in the formula: LME spot average price, TC/RC and exchange rate.
First, the LME spot average price, refers to the previous month's average LME spot price
Second, TC / RC, simply put, is the processing costs, is the miners and traders to smelters to pay the cost of processing copper concentrate into refined copper. Among them, TC is the crude refining fee, RC is the refining fee. tc to usd/ton copper concentrate offer, and RC to cents/lb of copper concentrate offer, the price relationship between the two is:
1 cent/lb = US$22.046/tonne.
The TC and RC are reduced to a uniform unit and summed to form a complete fee.
Generally speaking, when the TC/RC is relatively high, it indicates that there is sufficient supply of copper concentrate and smelters are able to take the initiative in negotiations; conversely, when the TC/RC is relatively low, it indicates that there is a shortage of supply and that mines are taking the initiative in their negotiations with smelters.
Here is how the domestic copper smelting charge is calculated.
Because there is a problem of copper content and recovery rate in the roughing process, so we have to convert TC to "cents/pound" as a unit, and add it with the same unit of RC, which is the comprehensive smelting cost of copper.
In order to calculate the convenience, need to be multiplied by 22.046 converted to "U.S. dollars / ton" as a unit, and then multiplied by the domestic exchange rate of the RMB against the U.S. dollar, the final result is the domestic copper smelting costs.
Assuming that the copper content of the copper concentrate is 30% and the smelting recovery rate is 96.5%, the formula for calculating the domestic copper smelting fee is:
Domestic copper smelting fee = [TC/(22.046×0.3×0.965)+RC]×22.046×Domestic RMB to USD exchange rate
For example, if the TC/RC specified in the contract is "55 USD/5.5 cents", then the formula for calculating the domestic copper smelting fee is:
Domestic copper smelting fee = [55/(22.046×0.3×0.965)+5.5]×22.046×Domestic RMB/USD exchange rate=311 USD/ton×Domestic RMB/USD exchange rate
Third, the exchange rate, generally using the onshore RMB exchange rate.
The above is about the production cost of imported copper, in addition, there is a small portion of copper concentrate smelted by domestic self-produced concentrates, this part of the production cost is extremely low, and there is no direct link with the LME spot price, if the by-products are not included, the average cost of its production is roughly 35,000 yuan / ton.
Finally, incidentally, the impact of sulfuric acid prices on copper production costs ......
Sulfuric acid is a by-product of the copper smelting process using copper concentrates, also known as non-ferrous smelting flue gas acid, the raw material comes from the sulfur in the ore, so the cost of raw materials is zero, and its production costs are mainly water, electricity, catalysts and other auxiliary materials.
No sulfuric acid is produced in the process of producing refined copper by using recycled scrap copper. Flue gas acid production cost advantage is obvious, a rough estimate, the general production of 1 ton of sulfuric acid cost is only 100 to 200 yuan, while the use of copper concentrate, then the production of 1 ton of copper can produce 4 tons of acid.
Sulfuric acid production has a great impact on smelters. When the market price of sulfuric acid is high, it can bring extra profit for the enterprise, but when the market price of sulfuric acid is low, it can also bring loss for the enterprise, especially when the market demand is insufficient, because sulfuric acid is not easy to store, if the smelting enterprise occurs the sulfuric acid bloating, it will lead to the enterprise to stop production.
