Spot copper concentrate TCs to rise as Japanese smelter resells raw materials

As of September 1, the SMM Imported Copper Concentrate Index (Weekly) stood at $92.57/mt, $0.36/mt lower than a week earlier. During the week, traders' offers rebounded slightly, and the supply exceeded demand. The price coefficient of Cu 20% domestic ore stood at 88.5-89.5%.

SMM understood that a deal of spot Robinson copper concentrate occurred between a trader and a smelter with TCs in the mid-to-low $90s. One smelter in south China purchased 10,000 mt of seaborne clean ore scheduled for delivery in October with TCs of $95/mt, which is reportedly Botswana Motheo copper concentrate. According to SMM survey, a Japanese copper smelter undertook maintenance due to an accident. This resulted in the redirection of the copper concentrate originally slated to arrive in Japan in mid-September to the Chinese market. Hence, 10,000 mt of Morenci copper concentrate was offered with TCs in the mid-to-low $90s, which is expected to arrive at Chinese ports in early October. A smelter in central China requested to defer its raw material shipments due to the solving of the raw material issue. Hence, the raw material supplier offered the resultant 10,000 mt of copper concentrate produced by Las Bambas mine, scheduled for loading in October, with TCs in the low $90s. The bid TCs for seaborne clean ore scheduled for loading in the fourth quarter were offered by mines in the high $80s to traders.

Overall, the current TCs offered by sellers for clean ore to be shipped in October are in the mid-to-low $90s, while the inquiries from smelters are declining. The inquiries for clean ore scheduled in the fourth quarter of this year stand at $95/mt. SMM believes that Chinese smelters will restock raw material inventories ahead of the negotiations on next year’s benchmark TC for long-term contracts in a bid to obtain more negotiation power over pricing. In the spot market, the redirection of cargoes by the Japanese smelter and several traders will bolster spot copper concentrate TCs. As of Friday September 1, copper concentrate inventories across seven major ports in China stood at 915,000 mt, up 19,000 mt from a week earlier.