Smelters Lowered Purchase of Copper Concentrates to be Shipped in Recent Months, and TCs Went up amid Sufficient Spot Supply

SHANGHAI, Aug 26 (SMM) -  As of August 26, the weekly SMM Imported Copper Concentrate Index stood at $76.71/mt, up $3.2/mt from a week earlier. The trades of copper concentrate in the spot market were relatively active this week, and the trades among mines and smelters rebounded most significantly. The TCs among mines and smelters stood at $74-76/mt, and some smelters were also willing to purchase the clean ore from traders at TCs of above $80/mt. The traded prices among mines and traders consolidated at $56-58/mt. The TCs between mines and smelters/traders continued to diverge, and major shipments were delayed to the fourth quarter.    

On the news front, due to the opposition of Peru's third Finance Minister Burneo and social unrest in the mining sector, the Peruvian government abandoned the plan to raise taxes on mining activities and lowered its forecast for Peru's economic growth in 2022 to 3.3%. As the US Federal Reserve raised the interested rates higher, the copper prices are expected to remain under pressure this year and next year. Therefore, the Peruvian government planned to increase mine output to offset the negative impact of falling tax revenue from mining sector. Antofagasta sued the U.S. government with the aim of resuming the operation of the copper-nickel ore project under Twin Metals in Minnesota, U.S. It asked the U.S. government to to restore the lease of the project, which the Minnesota government called off this January for possible water pollution. In Antofagasta's opinion, the removal of the lease had been illegal. At the same time, some opponents said that even if the copper-nickel ore project of Twin Metals met the environmental protection requirements, the following production operations in the mining area would still cause water pollution due to the relatively loose environmental protection restriction.    

According to SMM statistics, the inventory of copper concentrate at ports as of August 26 amounted to 871,000 mt in physical content, an increase of 64,000 mt in physical content compared with last week. The growth was mainly attributed to the increase in Fangchenggang port, and the inventory in smelters remained relatively abundant. So far, the inventory of smelters was generally high, and it is expected that the willingness of smelters to purchase spot goods will be low in the short term. The inquiry prices for clean ore to be shipped in the fourth quarter stood at $76-78/mt while the offers from sellers moved between $72-73/mt. The delivery-to-factory pricing coefficient of domestic spot Cu 20% copper concentrate stayed at 89-90%.