Slower Gains in Spot Copper Concentrate TCs amid Subdued Trades

SHANGHAI, Aug 23 (SMM) – Spot copper concentrate TCs rose slower last week as overall trades gradually weakened. As of Friday August 20, the SMM Imported Copper Concentrate Index stood at $58.74/mt, $0.17/mt higher than a week earlier. Most of the trades were spot cargoes scheduled for loading in October. Sellers and smelters were in a stalemate around $60/mt. Only some non-clean copper concentrate was traded with TCs of $61-62/mt, while mainstream traded TCs of clean concentrate exceeded $58/mt.

Recent disruptions to mines, including the closure at Alashan Port amid the pandemic, salary negotiations, strikes and road blockages at South American copper mines as well as global logistics issues, have prompted copper concentrate sellers to object gains in spot TCs. Traders stood on the sidelines against losses of long-term contracts and spot trades. Dongying Fangyuan reportedly plans to restart the smelting plant with an annual capacity of 300,000 mt in the fourth quarter, which boosted confidence of copper concentrate sellers. Smelters expect spot TCs to exceed $60/mt in light of the completion of stockpiling of spot cargoes scheduled for September, ample spot inventory that exceeds the safety level and limited actual disruptions to production at mines.

SMM believes that the impact on sellers and buyers would be significant if spot TCs exceed $60/mt, which are higher than the benchmark TC for the year.  The pricing coefficient of domestic copper concentrate (Cu 20%) remained unchanged between 89-91% (spot cargoes, delivery to factory) for domestic smelters.