First Round of Negotiations over next Year’s TCs under Long-Term Contracts have Ended, Spot Market is Muted

SHANGHAI, Nov 15 (SMM) - The SMM Copper Concentrate Index (monthly) stood at $87.22/mt in October, up $3.86/mt month-on-month. As of November 4, the SMM Imported Copper Concentrate Index (weekly) stood at $88.16/mt. The transactions of copper concentrate in the spot market were muted in October. According to SMM, some smelters offered the TCs at $86-88/mt for clean ore. The spot TCs between mines and smelters stood at $85-88/mt, and the spot TCs between mines and smelters stood at $85-88/mt, and the TCs for clean ore between traders and smelters stood at $86-88/mt.

On the news front, MMG reached an agreement with the Coyabamb community and removed the road blockade on November 7, allowing the production of Las Bambas mine to resume. MMG is currently negotiating with Tuntuma and Huincho communities to solve the problem of remaining road blockage, which continues to hinder the shipment of copper concentrates. Earlier, the Peruvian community once again blocked the main road of Las Bambas in Chumbivilcas province and an alternative route in Paruro province, preventing the logistics of production, supplies and food. Espinar province has started an indefinite strike against Glencore’s Antapaccay mine to protest the inaction of the mine and the government of Peru, saying it violated an agreement. Sergio Huaman, chairman of the Front for the Defense of Espinar's Interests, called it a "strong" protest, and did not rule out the possibility of building a mining corridor. Sergio Huaman made it clear that there would be restrictions on vehicle traffic in Antapaccay and that other mines, such as Las Bambas, Constancia and Hudbay, which would also be incidentally affected. SMM estimates that the copper production of Antapaccay mine will fall 9.1% YoY to 155,000 mt in 2022.

Generally, since the end of October, buyers and sellers will focus on the negotiations on the long-term orders of copper concentrate for 2023. The tight supply in the spot market and the abundant inventory of smelters have weighed on the trades in the spot market. Some smelters still received offers from traders. The TCs of 10,000 mt of clean ore from South America were offered at $89/mt, while smelters’ counter offers were $99/mt, and the shipment period is in January next year. According to SMM survey, some buyers expected that next year’s benchmark TCs would probably be in the range of $85-89/mt.  Some Chinese smelters and Freeport have finished their first round of negotiations over next year’s long-term contracts, and are about to start their second round of talks around mid-November. The price coefficient of domestic spot Cu 20% copper concentrates was unchanged at 88.5-89.5% on a delivery-to-factory basis as of November 10.