The global base metals market is experiencing a significant shift as the prices of gold, silver, copper, zinc, and lead see unprecedented increases. The London Bullion Market Association (LBMA) gold price closed at $2,333.50 per oz on Thursday, up by 13.06% since the beginning of the year. Similarly, the silver price closed at $30.31 per oz, marking a 27.25% increase since the start of the year.
The surge in precious metal prices has led to fierce competition in the copper concentrate market. With squeezed supplies, spot buying competition for copper concentrate has intensified, resulting in record-low copper concentrate treatment and refining charges (TC/RCs). Fastmarkets reported that the weekly copper concentrate TC index hit a record low of negative $3 per tonne on May 17, prompting smelters to seek concentrate with high gold and silver contents to capitalize on the rising precious metal prices.
Copper smelters are actively pursuing copper concentrate units containing gold to profit from the surging gold prices. This trend is also observed in zinc and lead concentrate markets, where copper is becoming more competitive following a price surge in the base metal.
Moreover, suppliers are now offering tougher payment terms for copper, zinc, and lead concentrate due to high demand and low spot availability. Payment terms, including the quotation period and payables of gold and silver, are playing a significant role in price negotiations, with traders seeking longer quotation periods and higher payables for gold as its price continues to rise.
The evolving dynamics in the base metals market highlight the impact of precious metal price surges on the broader metal industry and emphasize the importance of informed strategy development to navigate the changing landscape.
