Disruptions to overseas shipments exerted greater impact on TCs amid pre-holiday stockpiling

SHANGHAI, Mar 4 (SMM)—The SMM Copper Concentrate Index stood at $40.12/mt in February, a decrease of $5.88/mt from the previous month. As of February 26, the SMM copper concentrate index stood at $37.15/mt, a month-on-month decline of $4.93/mt.

The recovery of shipments from Chile and Peru fell short of expectations in February. Although some ports in Chile gradually resumed operations, the main ports used for the export from major copper mines remained under strict control due to wind and waves until CNY; Peru also announced an extension of the state of emergency to February 28. That did not affect mining and transportation, but has aroused concerns over the recovery.

Supply shortages are expected to intensify amid tighter cargoes for shipments in two months. In this scenario,  extremely low bidding TCs occurred which are believed to be offered by traders in a bid to secure deliveries under long-term contracts. Most smelters purchased cargoes for March and April ahead of CNY. Short supply lowered TCs of spot copper concentrate in February.

Concentrated pre-holiday stockpiling has intensified supply tightness, lowering TCs further. However, smelters would purchase at higher TCs post-CNY holidays. Contentious opinions between sellers and buyers have muted trades.

Declines in copper concentrate imports to occur in March

The import and export data for January and February will not be published separately. Instead, the combined data will be published in March, according to the General Administration of Customs.

Shipments arrivals have been low due to scarce imported copper concentrate, keeping domestic copper concentrate inventories in a tight balance. Imports in January and February are expected to stand below 2 million mt, and CNY is believed to have affected imports in February.

Chile, the largest supplier to China, exported 929,000 mt of copper concentrate in January, an increase of 11.71% month-on-month and 25.6% year-on-year. The statistics is believed to have included the amount shipped to ports as shipments from Chilean ports were severely hampered by wind and waves in January. This reflected that production at Chilean mines and shipments to ports were not affected. Based on the seaborne transport period, the reduction in domestic imports will occur in March and April, which is likely to have an impact on domestic copper production.