Spot Copper Concentrate TCs are Under Pressure amid the Shrinking Supply

SHANGHAI, Dec 19 (SMM) - As of Friday December 16, the SMM Imported Copper Concentrate Index (weekly) stood at $87.67/mt, $0.83/mt lower than the previous week. Spot copper concentrate trading picked up greatly last week. The traded TCs of clean copper concentrates between mines and smelters were $84-85/mt, those between mines and traders stood at $81-82/mt, and those between traders and smelters moved between $87-89/mt. The goods were scheduled to be shipped in the first quarter of 2023. According to SMM survey, the tight supply of spot copper concentrate in the market contributed to the decline in the SMM Imported Copper Concentrate Index for three consecutive weeks. Higher TCs offered by concentrate traders did not benefit themselves. SMM survey showed that the TCs between smelters and traders were benchmark less $3-5/mt. In such a context, traders were more willing to delay the settlement of spot positions and combine them into the long-term orders in early 2023. Recently, mounting risks facing the production and transportation of some major mines in South America further tightened the spot copper concentrate supply.

On the news front, mine production in South America was disturbed again last week.  According to foreign media, a Peruvian community once again blocked an important road near Cusco, Canchis Province, and other roads in Canchis were also hindered by protesters. Therefore, the warehousing capacity of the Las Bambas copper mine was about to reach its limit, which increased the probability of the mine's production reduction or suspension. The in-plant copper concentrate inventory has ballooned to about 500,000 mt (about 125,000 mt in metal content), and Las Bambas has taken emergency measures to maintain its production until the end of the year. First Quantum failed to reach an agreement with the Panamanian government on the operation of the Cobre Panama copper mine due to First Quantum's "unreasonable demands". The Panamanian government warned that it would take "backup measures" to ensure the normal operation of the mine.

According to the SMM data, the port inventory of copper concentrate last Friday stood at 746,000 mt in physical content, down 13,000 mt WoW. As of last Friday, Antofagasta and Anglo American still did not follow the previously set benchmark TCs for copper concentrate in 2023 of $88/mt. The pricing coefficient of domestic spot Cu 20% copper concentrate stood at 88.5-89.5% on a delivery-to-factory basis.