The commonest dispute on copper concentrate deals is not fraud — it is a buyer or seller treating the provisional invoice as the price. The final invoice lands months later — final assays, a different LME average — and one side is convinced they were shorted. In our FOB Karachi marketing, walking counterparties through the chain before signature prevents almost all of it. This guide walks the chain, weighbridge to final invoice, anchored to real purchase contracts filed with the US SEC.
How is copper concentrate priced?
Copper concentrate is priced as payable metal minus deductions: dry tonnes × payable copper (commonly 96.5% of content, minimum 1-unit deduction) × the LME average over a quotational period, plus gold and silver credits, minus treatment and refining charges (TC/RC) and penalty deductions. Roughly 90% is paid provisionally against documents; the balance settles after final assays.
| Step | What gets fixed | Where the number comes from |
|---|---|---|
| 1. Weigh | Wet weight (wmt) | Draft survey / weighbridge at load or discharge |
| 2. Dry | Dry weight (dmt) | Moisture determination on sampling; dmt = wmt × (1 − H₂O%) |
| 3. Pay | Payable Cu, Au, Ag | Contract payable terms applied to final assays |
| 4. Deduct | TC/RC and penalties | Benchmark or spot index; penalty clauses per assay |
| 5. Price | Metal value | LME average over the contractual quotational period |
| 6. Settle | Provisional → final invoice | ~90% against documents, balance after final assays and prices |
Steps 1–2: Weigh Wet, Settle Dry
Concentrate ships wet — typically high single-digit moisture — but every commercial term applies to dry metric tonnes: dmt = wmt × (1 − moisture%). Moisture comes from the same sampling as the assay lots, and carriage falls under the IMO's IMSBC Code, which caps moisture at the certified Transportable Moisture Limit (TML); the Cormin contract obliges the seller to present TML, FMP, and moisture certificates on request. Sealed sample sets go to buyer and seller, with a reserve set held by a recognised inspector (SGS, Alfred H Knight, Bureau Veritas) for umpire use if assays disagree.
Step 3: Payable Metal Is Less Than Assayed Metal
No smelter pays for 100% of contained copper at full freight. The working convention is 96.5% of contained Cu with a minimum 1.0-unit deduction; the Trafigura-group Cormin contract instead pays 100% of final copper after a flat 2-unit deduction, and 95% of silver at LBMA — proof that payable structures vary and must be read, not assumed. Gold typically pays 90–95% and silver 90% above a qualifying threshold (often 30 g/t). For the formula overview, see our concentrate-versus-refined-copper guide.
Why is the TC deduction near zero in 2026?
Because smelter capacity has outgrown mine supply, competition for feed has pushed the 2026 annual benchmark to $0.0/dmt with a zero refining charge (as of 2026-07-01 still the standing annual reference, source: Fastmarkets settlement reporting) — the first zero settlement on record. Spot sits far below: Platts assessed the CIF China clean concentrate TC at −$78.50/t (as of 2026-04-09, source: S&P Global Commodity Insights), with deals reported near −$220/t (as of 2026-06-30, per trade-press and Fastmarkets reporting). The CSPT declined at its 2026-06-17 Yantai meeting to issue quarterly guidance — a sixth straight quarter without one (source: Reuters via Kitco). A negative TC deducts like any other — it is added to the seller's proceeds. Full history and November outlook: our copper TC/RC benchmark analysis; penalty deductions for As, Pb, Bi, and Sb — bilateral and confidential — are decoded in the smelter-clause guide.
What is the quotational period and why does it move the price?
The quotational period (QP) is the window whose LME average prices the payable metal. The Cormin contract sets "the month following the Month of arrival at the warehouse (M+1)"; the documented spectrum runs from the month prior to shipment through M+0 out to M+3 and M+4. Trade shorthand is "MAMA", month after month of arrival: a second SEC-filed agreement, Freeport Indonesia to PT Smelting, prices copper at 2 MAMA and grants the buyer a written 2-or-3-MAMA election with a declaration deadline and a default if silent — the three things any QP option must name. Copper moves materially inside those windows, so the QP allocates price risk and is the leg a hedging desk offsets on the LME. Settlement runs in two passes: a provisional invoice — 90% of provisional value on final wet weight, final moisture, provisional assays, and forward LME prices for the QP — paid against documents; then a final invoice once final assays and the completed QP average are known, payable within 3 banking days, any overpayment refunded the same way. Sellers timing China cargoes should read the QP against the import window in our LME-SHFE arbitrage guide.
Worked Example: One Cargo, Provisional to Final
Take 5,000 wmt of copper concentrates at 9% moisture: 4,550 dmt. At Cu 22% — top of our standard export tier, with Au 1–3 g/MT and Ag 20–60 g/MT payables — 96.5% implies a 0.77-unit deduction, below the 1.0-unit minimum, so the minimum binds: payable copper is 21.0%, not 21.23%, giving 955.5 t payable. Assume the QP's LME cash average settles at $9,600 (illustrative, not a market quote): metal value ≈ $9.17m. At the zero benchmark the TC/RC deduction is nil; a cargo linked to a spot index at minus 100 per dmt would instead add about $455k. Gold and silver credits stack on top; penalties, if triggered, come off. The provisional invoice pays ~90% against documents; the final invoice settles the rest months after loading.
Where Concentrate Settlements Go Wrong
- Comparing offers by headline price-per-tonne. Offers with different payables, QPs, and penalty clauses are not comparable on the headline line — rebuild both to net proceeds per dmt.
- Treating the provisional invoice as the price. The final invoice reprices on final assays and the completed QP average; budget and hedge on the final structure.
- Ignoring the minimum-deduction branch. Below roughly 28.6% Cu, the 1.0-unit minimum deducts more than the 3.5% payability gap — exactly where mid-grade export concentrates sit.
- Settling on wet weight. Water pays no invoice but costs freight, and an IMSBC TML failure stops the loading.
- Skipping the umpire clause. Without a reserved sealed sample and a named umpire lab, an assay dispute has no clean resolution path.
- Assuming the benchmark applies to your spot cargo. Spot and benchmark diverged historically wide this year — index the contract explicitly (benchmark analysis above).
Next step: Review grade specifications for copper concentrates and copper ore, or request a delivered-cost indication quoted LME-minus-TC with named payables, QP, and penalty terms. The Minerals & Mining division lists the full portfolio.
Additional Market Context
The working references: LME cash copper for the pricing leg; the Fastmarkets TC index, CIF Asia Pacific, plus CSPT signals for the deduction leg; the ICSG monthly bulletin for the balance; the IMO IMSBC Code for carriage. For readable templates of the full clause set, the SEC-filed Cormin Mex (Trafigura Group) and Freeport Indonesia–PT Smelting contracts in our sources are rare complete public examples.
Last reviewed: 2026-08-06. Worked-example arithmetic uses labelled assumptions, not market quotes; dated market levels are as marked and move daily — verify against the named sources at decision time.
