Spot Copper Concentrate TCs Drop under Pressure Owing to the Disturbances on the Supply Side

SHANGHAI, Dec 26 (SMM) - As of Friday December 23, the SMM Imported Copper Concentrate Index (weekly) stood at $86.46/mt, $1.21/mt lower than the previous week. Spot copper concentrate trading was extremely sluggish amid the spread of COVID-19 outbreaks. The traded TCs of clean copper concentrates between mines and smelters were $84-85/mt, while the market heard inquiries and offers only. Traders quoted the TCs of clean concentrates at $81-82/mt. The goods were scheduled to be shipped in the first quarter of 2023. Market quotes reduced owing to the COVID-19 outbreaks and the overseas Christmas holidays. 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.

The recent frequent disturbances on the supply side have also cast a certain impact on the spot market. A fire at the Ventanas port in Chile hindered the shipments of mines. In Peru, large-scale riots blocked the shipments at the Matarani port (SMM data showed that as of last Friday, shipments of copper concentrates flowing out of the Matarani port totalled 3.65 million mt, and the exports were 106,300 mt in November). At the beginning of the month, the truck drivers in the US went on strike, weighing on the US copper concentrate exports. Moreover, the warehousing capacity of raw materials of the Las Bambas copper mine was about to reach its limit.

On the news front, Pedro Castillo was dismissed by Congress and arrested, and a fierce protest broke out in the country, putting pressure on the new government. As a result, the Peruvian government announced a state of emergency. The protest spread to Matarani port and hindered the shipment of copper concentrates. At the beginning of the week, the Panamanian government ordered First Quantum's Cobre Panama copper mine to cease operations because the company failed to reach an operating agreement with the government. The two parties will hold new talks this week to seek a new tax agreement. Besides, a fire broke out at Ventanas port in Chile, which affected the shipment of copper concentrates. What’s more, Rio Tinto spent $3.3 billion to complete the acquisition of the Oyu Tolgoi copper-gold mine held by Turquoise Hill Resources, which owns a total of 66% of the copper-gold mine's shares.

According to SMM data, the port inventory of copper concentrate last Friday stood at 744,000 mt in physical content, down 2,000 mt WoW. Last week, Antofagasta, Anglo America and Chinese smelters set the TCs of copper concentrates under long-term contracts in 2023 at $88/mt. The pricing coefficient of domestic spot Cu 20% copper concentrate stood at 88.5-89.5% on a delivery-to-factory basis.