TC/RCs for Copper Concentrate Continues to Rise; Spot Trading Improves Slightly

SHANGHAI, Aug. 5 (SMM) – LME copper rallied after dipping to a low of USD 6,721/mt last week, but with upward momentum erased by strong resistance, according to SMM data. Domestic copper prices have been consolidating for about one month, leaving domestic copper mines under mounting pressure. Some holders of copper concentrate sold goods to generate cash flow. Large mines reported stable supplies, little affected by copper price changes. 

 

The SHFE/LME copper price ratio rose slightly last week, but traders and smelters were both wary of buying copper concentrate, requiring additional contract and payment terms, while also preferring to buy high-grade copper concentrate. In the face of lower price quotes for low-grade ore, suppliers opened negotiations with smelters and traders.

 

Currently, spot TC for copper concentrate continues to rise and may advance to USD 75/mt. The following two factors are helping push up spot TC. First, global copper concentrate supply is growing, with output at most mines up during 2Q on a YoY basis, according to financial reports from global ore suppliers. Second, market expectations over increased output at the Oyu Tolgoi mine in Mongolia also boost market confidence despite the limited amounts obtained in initial batches. 

 

In China’s domestic market, prices for copper concentrate (20%) were 85% of copper prices, and prices for copper concentrate (25%) were 86-88% of copper prices. At present, domestic copper concentrate in China enjoys significant price advantages, and existing refined copper prices is limiting the possibility that pricing coefficients for copper concentrate will rise further

 

The latest market survey shows that smelters believe there is still upward room for TC of copper concentrate.