Increase in Spot Copper Concentrate TCs was Hindered by the Overseas Supply

SHANGHAI, Apr 25 (SMM) - As of Friday April 22, the SMM Imported Copper Concentrate Index (weekly) stood at $82.63/mt, $1.48/mt higher than the previous week. The market transactions were relatively slack last week, but the traded prices moved up to $81-82/mt, even $84-85/mt. The overall transaction was still concentrated on the sources scheduled to be shipped in May and June. It was reported that the restocking of smelters in the second quarter was completed. With the rapid rising of TCs, quotes of small orders from traders decreased, while quotes of long-term orders increased. The overall supply of the copper concentrate market was still sufficient.

On the news front, Minmetals Resources announced on Hong Kong Stock Exchange that on April 14, 2022, members of the Fuerabamba community entered Las Bambas to protest their alleged failure to observe their social investment commitments. Some members of the Huancuire community also joined the protest. For the sake of safety, Las Bambas would not be able to maintain the production of copper since April 20, 2022 (Peru time). MMG is still committed to working closely with the Peruvian government and community members to fulfil its commitments and conduct transparent and constructive dialogue to reach a lasting agreement. On April 20, local time, Peruvian Prime Minister Aníbal Torres said that Peru would declare a state of emergency in the area near Cuajone copper, a subsidiary of Southern Copper. Previously, nationwide protests in Peru have attacked many large local copper concentrates. According to SMM research, the output of Las Bambas copper in 2021 was about 290,300 mt in metal content, and Cuajone copper in 2021 was about 170,000 mt in metal content, which together accounted for about 20% of the copper output in Peru. At the same time, on April 21, the Chilean Constituent Assembly began to discuss dozens of proposals on mining, water and environmental rights and voted on Friday to reshape Chile's regulation of the production of minerals such as red metal and lithium. The successive attacks in Peru and Chile caused the market to start worrying about the supply of copper concentrate in the long run. Even though mine incidents like Las Bambas are expected to ease in the short term, it is still difficult to eliminate the disturbance caused by the leftist policies on the macro level.

On the whole, domestic smelters are not willing to purchase as the restocking in the second quarter is finished, and the spot market has not been impacted by too many supply-side disturbances, suppressing the TCs that rose quickly in the early stage. In addition, it is said that a private smelter in Shandong will restart its production at the end of May, boosting the sellers’ confidence to some extent. In the second half of 2022, there are still QB2, Quellaveco and other new expansion plans overseas, so the supply of copper ore is expected to be sufficient. Last week, the pricing coefficient of domestic spot Cu 20% copper concentrate remained unchanged at 89-91% on a delivery-to-factory basis.

Disclaimer:

The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.