Key takeaways:

Copper concentrate pricing continues to shift away from annual TC/RC benchmarks toward spot-based mechanisms.
Growing market volatility is creating trading opportunities for Glencore‘s production and marketing business.
Glencore expects a secondary ASX listing to boost investor access to copper exposure and support rapid index inclusion.
Copper market moves away from annual TC/RC benchmarks
In response to a question about the future of annual copper concentrate treatment and refining charges (TC/RC) benchmarks, Nagle said a shift away from tying contracts to long-term benchmark pricing would be consistent with developments in other commodity markets, citing the collapse of the Merafe-Glencore chrome benchmark and the disappearance of the Newcastle coal benchmark.

He added that, in markets increasingly driven by spot trading and price volatility, pricing mechanisms could move away from long-term benchmarks toward spot-based transactions.

The company also said its position as both a producer and commodity marketer leaves it well placed to benefit from increased volatility in copper concentrate markets.

“We can take advantage of the continued volatility and movement in these differentials and the TC/RCs. For us, we think it is quite beneficial,” Glencore said.

Spot copper concentrate pricing gains momentum
A move toward spot pricing has already emerged in the copper concentrates market.  

Index-linked deals, which appeared only sporadically in early May at premiums of around $6 per tonne to the smelter index, increased and moved deeper by late July to $20–$30 per tonne.

Fastmarkets’ weekly copper concentrates TC index recorded its largest single-week decline on record in mid-July, driven by a return of fixed-price transactions as sellers sought to lock in value amid rapidly falling TC/RCs.

In July, Fastmarkets reported that Chilean miner Antofagasta and several Chinese copper smelters had agreed to use spot TC/RC indices for mid-year contractual concentrate supplies, marking a further shift away from fixed benchmark pricing.

Glencore’s secondary listing on the ASX 
The company also announced ambitions to establish a secondary listing on the Australian Securities exchange (ASX) by October 2026 with hopes to increase investor exposure to Glencore’s copper business.

“There was a lot of interest in our company, very much interest in investing in our company, investing in our copper story, and our copper play. As you know the Australian Stock Exchange lacks material copper exposure, particularly with Aus Minerals and Metals Acquisition Corp no longer being listed there,” said Nagle.

Glencore plan to enter the ASX 200 index within the first two months of listing, which would require A$1.5 billion ($1.05 billion) worth of stock held on the line, before entering the ASX 100 shortly after, which requires A$5.5 billion.

The company believed that pension and superfunds would be very receptive to the move and said that the Australian public are very aware of Glencore’s business due to the nature of their economy.  

Glencore stressed the need for a secondary listing on the ASX as financial rules on the ASX restricted how much investors could invest in Glencore’s stock, and the listing could increase the company’s copper exposure.

“This provides material additional ASX copper exposure for local investors, offsetting losses to M&As in recent years,” Nagle said.

South Africa listing provides blueprint for Australia

In South Africa, Glencore entered secondary listing in the Johannesburg Stock Exchange (JSE) and placed 8% of their register on the JSE line, worth around A$9.5 billion.

“Organically and over time, we built up a big shareholding in South Africa,” Nagle said.

He added: “As a proxy for what we’ve done in South Africa, we can certainly see that as a read across to Australia, and there’s no reason to believe why we can’t have ASX 100 inclusion in a short period of time.”

From: Joseph Flynn and Madeline Morgan, Fastmarkets, https://www.fastmarkets.com/insights/glencore-ceo-backs-shift-away-from-annual-tc-rc-benchmarks-amid-growth-in-spot-trading/.