[heavy] the TC of copper concentrate produced by long single benchmark in 2019 is lower than that in 2018.

Published: Nov 15, 2018 18:53

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According to the latest understanding of SMM, Jiangxi Copper and Antofagasta reached a negotiation on the long order of copper concentrate in 2019, signing TC/RC of US $80.8 / ton, 8.08 cents / pound, and TC decreased by US $1.45 / ton compared with 2018. The price is in line with market expectations. Supply growth in the copper market is widely expected to decline in 2019, while capacity in copper smelters will increase.

According to SMM data, the spot copper concentrate TC/RC in 2018 has been climbing since May, not as a result of increased copper concentrate production, but because of problems with some of the world's crude production capacity. Such as: India Vedanta's 400000 tons / year crude production capacity shut down, Philippines PASAR acid equipment failure, Yuguang gold lead oxygen equipment pipe collapse, Liaoning far East Copper smelting furnace water and so on.

SMM expects copper supply growth to rise to 3.3 per cent in 2018 from minus 1.0 per cent in 2017, and expects copper supply growth to slow again to about 2.4 per cent in 2019, with mineral copper growth of about 500000 tons. The largest increment is the Cobre Panama mine owned by First Quantum, which is expected to be 150000 tons.

Benefiting from the high level of copper concentrate TC/RC in previous years and the domestic demand for self-sufficiency at the end of electrolytic copper, China's smelting capacity has entered the peak period of production in the past two years. According to SMM statistics, the new global copper smelting expansion projects are basically concentrated in China.

China's copper smelter projects have been intensive in the past two years, and SMM expects more than 700000 tons of annual capacity to be delivered in 2019. China's electrolytic copper production is expected to be 8.75 million tons in 2018, an increase of 9.4 percent, and 9.5 million tons in 2019, an increase of 8.6 percent.

SMM expects the global copper concentrate to be in short supply, while the concentrated construction of copper smelter projects will put pressure on TC/RC.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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