SHANGHAI, Jul. 25 (SMM) – Rio Tinto commenced copper exports from its Oyu Tolgoi mine (OT mine) July 9, with 60,000 mt of copper concentrate reportedly shipped to north China.
TC for spot copper concentrate in China’s domestic markets has held steady at USD 70-75/mt since mid-July, according to SMM data, little affected by the exports from OT mine. The limited influence is attributed to two major reasons.
First, the shipments to China were traded in the form of long-term contracts. Meanwhile, domestic smelters would unlikely abandon spot goods in the near term for fear of unstable supply from OT mine at its early stage of exports.
Second, market doubted the actual amount of the initial shipment may be less than 60,000 mt.
Rio Tinto released its operation review for second quarter July 16, revealing that output of mined copper from OT mine hit 4,400 mt in Q2. Thus, the mine’s Q2 copper concentrate yield is estimated at 16,900 mt based on the average grade of 26.1% reported by the company. Since OT mine has yet to achieve full capacity (450,000-500,000 mt/yr), its copper concentrate output is unlikely to reach 400,000 mt in early July.