Spot TCs Kept Falling under Pressure last Week amid the Imbalance of Supply and Demand

SHANGHAI, Jul 25 (SMM) - As of last Friday July 22, the SMM Imported Copper Concentrate Index (Weekly) stood at $71.49/mt, $0.84/mt lower than the previous week. Last week, the spot trading of copper concentrate was slack, and the imported copper concentrate TCs kept falling to $71-72/mt, which were mainly scheduled to be shipped from August to October.  According to SMM survey, the spot supply of clean ore was still tight. In order to source goods or deliver the long-term orders, some smelters and traders further lowered the spot TCs of copper concentrate, hence the spread of TCs among smelters, traders and mines remained at nearly $20/mt. 

On the news front, the negative factors on the supply side intensified last week. First of all, BHP responded to the Chilean government's plan to raise the mining tax, indicating that BHP might reconsider its mining investment in the country. Besides, the costs of the expansion project of the Oyu Tolgoi copper-gold mine owned by Rio Tinto were $7.06 billion, higher than the previous estimated $6.75 billion. Secondly, Codelco suspended all its mine construction projects due to the death of workers in the Rajo Inca project and Chuquicamata underground mine project. Finally, according to the production data, the copper concentrate output of Rio Tinto in the second quarter was 126,000 mt, up 9% YoY and 1% QoQ, and the output of copper cathode stood at 49,400 mt, down 5% YoY and 10% QoQ. The guided output of copper concentrate in 2022 was 500,000-575,000 mt, and that of the copper cathode was 230,000-290,000 mt. In the second quarter, the output of copper concentrate of the Antofagasta copper mine was 129,800 mt, a year-on-year decrease of 6.5%. 

On the whole, the  copper concentrate spot market was sluggish. Last week, the demand from some market participants increased shortly, resulting in the imbalance of supply and demand, and the spot TCs kept falling under pressure. The raw material supply to most large smelters was sufficient. Some smelters that had restocking demand quoted the TCs of clean ore at $74-79/mt, while the sellers offered $71-72/mt. The pricing coefficient of domestic spot Cu 20% copper concentrate remained unchanged at 89-90% on a delivery-to-factory basis WoW.