China´s boycott of Australian copper might backfire
After announcing an embargo world markt prices for copper have already gone up.
Byron King (B_K)October 5, 2026
An unofficial Chinese import ban on Australian copper concentrate imports could affect Chinese smelters in their negotiations with miners over benchmark treatment fees for 2021, traders and analysts said. Australian media reported that Chinese importers were informally warned by Chinese customs officials that inspections of a number of Australian goods, including copper concentrate, will be intensified starting November 6 amid a diplomatic dispute between the two countries.
The orders had already forced the dealers to reroute some small deliveries to China, two dealers told Reuters on Friday. While Australia isn't a big supplier of copper concentrate to China, the dispute arises because supplies from South America have been disrupted by the coronavirus epidemic, which is likely to undermine the bargaining power of Chinese smelters to buy next year. "On the face of it, the market is tightening for the Chinese, so they ultimately have to push their prices down a little to achieve this security of supply," said ANZ analyst Daniel Hynes in Sydney. The miners pay smelters treatment and refining charges (TC / RCs) to turn the concentrate into refined metal.
When supply is scarce, refiners have to charge less to attract what they need. Chinese smelters and global miners meet in November each year to negotiate the annual benchmark for TC / RCs for the following year. "The timing couldn't have been worse. The only area that is not struggling with the logistics impact of COVID-19 is Australia, and that's the place they banned. The South Americans will use this as leverage, "said an Australia-based copper concentrate trader. Chile and Peru are China's largest suppliers. Spot TCs hit an eight-year low of $ 50.50 per ton this week, a 30% decrease compared to the March 2020 peak and well below the annual benchmark of $ 62 per ton, data from Asian Metals shows.
"The ban could drive the spot market down for China. A decline is fair for the 2021 benchmark, but I think it will actually hover around $ 60 a ton and 6 cents a pound," said one in Singapore resident dealer. A second Australian-based trader forecast the benchmark at mid-$ 50 per ton. DIVERSION In the short term, dealers are trying to reroute deliveries from Australia. "If you have a ship drifting offshore full of copper concentrate, try to find a home quickly," said a second Australian-based dealer.
Traders said Australian shipments destined for China could be diverted to Japan, Korea, India or to blending plants in Taiwan or Malaysia. Australian manufacturers of lead and zinc concentrates and precious metals are also forging contingency plans in the event that the ban is extended, two traders said. "We have no idea how long (this will last). It depends on government relations," added a trader with a Chinese smeltery. The ban is expected to have limited effects on the balance between supply and demand in the Chinese concentrate market, as Australia accounts for just under 5% of China's concentrate imports.
The two largest Australian copper producers, the BHP Group and the trading house Glencore, are also unlikely to be affected. BHP does not export copper concentrate, and Glencore can divert material to its two smelters in Australia and the Philippines, they said. Glencore and BHP declined to comment. China's Copper Concentrate Imports China's copper treatment fees are falling to their lowest level in eight years.
