TCs of Spot Copper Concentrates were Supported by the Slack Demand from Smelters

SHANGHAI, Oct 24 (SMM) - As of last Friday October 21, the SMM Imported Copper Concentrate Index (weekly) stood at $87.35/mt, up $0.97/mt from October 14. Spot copper concentrate trading was slack last week due to the approaching negotiation period for the TCs under long-term contracts in 2023 and the smelters’ sufficient inventories. According to SMM survey, TCs of clean concentrates between mines and smelters were $84-89/mt last week, and those between traders and smelters stood at $87-89/mt, which were scheduled to be shipped in December.

On the news front, the copper production data of mining companies in the third quarter of 2022 is gradually released. MMG's total copper output in the third quarter was 95,600 mt, an increase of 4.8% year-on-year and a quarter-on-quarter increase of 115%; Freeport's total output was 478,000 mt, up 3% year-on-year but down 14% quarter-on-quarter; Rio Tinto's total output stood at 138,000 mt, up 9.5% YoY and 10.4% QoQ; BHP's output was 410,100 mt, up 9% YoY but down 11% QoQ. First Quantum Minerals may win the long-awaited contract of Cobre Panama copper mine in Panama in November, after it started negotiations with the Panamanian government on the renewal of the Cobre Panama copper mine in September 2021. First Quantum Minerals agreed in January 2022 to increase royalties at the Cobre Panama copper mine to $375 million a year, while the authorities would share 12%-16% of its gross profit. Antofagasta's Los Pelambres copper mine reached an agreement with the labour union, which includes higher wages and welfare, to avoid a strike.

According to the SMM data, the port inventory of copper concentrate last Friday October 21 stood at 763,000 mt in physical content, down 33,000 mt compared with the previous week. Transactions of spot copper concentrate were sluggish last week. Smelters quoted the TCs of clean concentrates that were scheduled to be shipped at the end of 2022 at $91-92/mt, while the sellers offered $81-85/mt. The spot trading will stall amid the negotiation period for TCs under long-term contracts in 2023, the limited spot positions, and the smelters’ sufficient copper concentrate inventory. The pricing coefficient of domestic spot Cu 20% copper concentrate stood at 88.5-89.5% on a delivery-to-factory basis.