Antofagasta, Japanese And South Korean Smelters Finalised Copper Concentrate Tcs Under Long-Term Contracts For Second Half Of 2023 And First Half Of 2024

As of Wednesday June 21, the SMM Imported Copper Concentrate Index (Weekly) stood at $91.1/mt, $0.55/mt higher than June 16. During the week, SMM understood that there was a deal between a smelter and a trader for 20,000 mt of clean ore with TCs of $92/mt, scheduled for loading in August. Inquiries of smelters for clean ore scheduled for loading in August currently stand at $95/mt, while offers by traders exceeded $88/mt. The price coefficient of Cu 20% domestic ore stood at 88.5-89.5%.

SMM understood that Antofagasta, Japanese and South Korean smelters finalised copper concentrate TC/RCs under long-term contracts for the second half of 2023 to the first half of 2024 at $88/mt and $0.088/mt, up $13/mt and $0.013/mt respectively, from those between the second half of 2022 and the first half of 2023. According to some domestic smelters participating in the negotiation, they lacked interest to follow the TC/RCs. Chinese smelters are expected to accept TCs of $91-92/mt.

The contract structures of the four major smelters - China Copper, Jiangxi Copper, Jinchuan and Tongling Nonferrous Metals are different from those of the smelters in Japan and South Korea.

In the second half of this year, several factors will affect the trend of spot copper concentrate TCs. Teck Resources delayed the first batch of copper concentrate shipments from Quebrada Blanca Phase 2 in Chile, originally scheduled for the first quarter, to July-August. If Quebrada Blanca Phase 2 can produce and ship copper concentrate as scheduled in the second half of the year, China’s copper concentrate supply will increase, bolstering spot TCs further.

According to foreign media reports, the "armed protection period" of MMG's Las Bambas copper mine in Peru will end between the end of June and early July, and the salary negotiations of mining companies will gradually start in the second half of the year. SMM expects community road blockages and strike protests in Peru in the third quarter will raise disruptions to spot copper concentrate supply in China in the second half of the year. According to SMM statistics, the inventory of copper concentrate at five Chinese ports was 622,000 mt as of June 16, a growth of 13,000 mt from a week earlier.