Blending commodities: transformations in form
To be fit for purpose physical commodities need to match customer specifications. Since commodity producers derive their product from the ground, its quality and characteristics are variable.
Blending in copper markets: the Chinese example
Chinese copper consumption has grown markedly since 2000 making the country the world's largest consumer. The quality of concentrate available has suffered with the growth in demand. As existing mines get depleted, smelters are more reliant on new, sometimes arsenic-rich, sites for their concentrate. This poses health and safety issues. Processing techniques such as oxidisation can reduce arsenic content, but these are costly and they also affect copper levels. Another solution is to blend the concentrate. Mines producing arsenic-rich concentrate sell at a discount to trading firms. Traders blend the material with cleaner concentrates before selling on to smelters.