Second Round of Long-Term Copper Concentrate Contract Negotiations Began

SHANGHAI, Nov 29 – According to SMM, China Copper, Jiangxi Copper, Tongling Nonferrous Metals and Freeport kicked off the second round of negotiations on the benchmark TCs for long-term contracts in 2022 last week. The parties stated their views on the market next year and exchanged the preliminary suggestions on TCs. Although the involving parties have reached a certain consensus on market supply and demand next year, there is a large difference on proposed TCs. The second round of negotiations between Antofagasta and Japanese smelters will start in the second half of this week, and the time of negotiation with the Chinese smelters has not yet been confirmed. For long-term orders between traders and smelters, the TCs of both parties are roughly $2-8/mt lower than the annual benchmark due to different packages, which improves from 2021.

SMM believes that at present, domestic smelters have abundant inventory, and their willingness to purchase is not strong and they stand on the sidelines during the long-term negotiations. Most smelters in Henan, Shanxi, Inner Mongolia, north-east China and Shandong said that the environmental protection management and control for the Olympic Games will affect the operating rates in the first quarter of next year, and will also hamper their purchase of raw materials.