SHANGHAI, Mar 23 (SMM)—As of Friday March 19, the SMM imported copper concentrate index (weekly) stood at $32.8/mt, up $0.73/mt from a week earlier. Trades improved but spot TCs diverged, with high-20s and mid-30s. More traders quoted at high-20s, but most smelters insisted on the bottom line of $30/mt.
Glencore’s Antapaccay copper mine in Peru (with an output of 186,000 mt of metal content in 2020) was blocked by the local community two weeks ago, forcing the mine to suspend operations. Meanwhile, transportation of Las Bambas and Constancia was hampered. But this situation has eased last week. The labour union of Antofagasta’s Los Pelambres copper mine agreed to extend the strike mediation time for five days and this has reduced the risk of strikes. In addition, the commissioning of BHP's Spence which can ship cargoes in the second quarter boosted market confidence. However, a series of incidents occurred at overseas mines last week, suppressing market confidence. The Peruvian National Transport and Drivers Association (GNTC) went on an indefinite strike across the country on March 15, which has brought new obstacles to the transportation of copper concentrates in Peru, and the negotiations with the government are not smooth at present.
On the other hand, a case of COVID-19 infection was discovered at Oyu Tolgoi copper mine, slowing the speed of cargoes entering and exiting bonded warehouses at Ganqimaodu port; Papua New Guinea's Ok Tedi copper-gold mine (an annual output of nearly 100,000 mt of metal content) started a two-week suspension on March 19 due to the surge in the number of COVID-19 infections.
SMM believes that the release of new and expanded capacity at copper mines in the middle of the year will increase negotiation power over pricing at smelters. On the other hand, disruptions to overseas supply have prompted mines to lower bid solicitation TCs. The market will focus on the CSPT’s quarterly meeting held in Shanghai on March 26. The pricing coefficient of domestic spot copper concentrate (20%) stood at 88.5% last week as copper prices moved between 65,000-68,000 yuan/mt, flat from the previous week.
