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Q3 TC/RCs guidance set at $30/T and 3.0 cents/lb

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Prices lowest in nine years due to supply shortages

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Smelters eye some improvements in supply tightness in Q3

(Recasts with milestone in paragraph 1, adds details)

By Siyi Liu and Mei Mei Chu

BEIJING, July 10 (Reuters) - China's top copper smelters

agreed on Wednesday on a price guidance for third-quarter

processing charges that is the lowest since at least 2015, two

people with knowledge of the matter said.

Despite a sharp drop from previous quarters, the latest

guidance prices were higher than current spot levels, as

smelters expected supply shortages to moderately ease in the

next few months.

At a meeting of the China Smelters Purchase Team (CSPT) in

Shanghai, attendees agreed the guidance prices for copper

concentrate processing treatment and refining charges (TC/RCs)

at $30 per metric ton and 3.0 cents per pound, the sources said.

The sources declined to be named because they are not

authorised to speak to the media. CSPT officials were not

immediately available to comment.

The guidance is less than half of the first-quarter guidance

of $80 per ton and 8.0 cents per pound, and is the lowest

according to Reuters' records which date back to the third

quarter of 2015.

In March, the group decided not to set any guidance prices

for the second quarter, following a dramatic fall in spot TCs on

tightening supplies.

The spot TCs index by pricing rating agency Fastmarkets

tumbled to a historic low in April. It stood at $-4.1 per ton on

Friday.

There are signs that spot TCs are stabilising, and smelters

have also forecast more supply in Q3 given inventories and

production plans, one of the meeting attendees said.

CSPT, consisting of over 10 top copper smelters, holds

quarterly meetings to discuss market conditions and give

guidance prices for the near-term spot market.

TC/RCs, a key source of revenue for smelters, are paid by

miners when they sell concentrate, or semi-processed ore, to be

refined into metal.

They are a gauge of availability for copper concentrates

used in the production of refined copper. A lower charge signals

less supply, which started with the December closure of First

Quantum's Cobre mine in Panama.

Meanwhile, demand in China increased as smelters ramped up

their capacity. China's refined copper output grew 8.2% in the

first five months to 5.54 million tons this year, according to

data by National Bureau of Statistics.

China imported 11.59 million tons of copper ore and

concentrate in the first five months this year, up 2.7% from the

same period last year, customs data showed.

Last month, Chilean miner Antofagasta settled a

mid-year agreement with some Chinese smelters at $23.25 a ton

and $2.325.