Indonesian Copper Concentrate Export Permit Approval Imminent: Can Distant Water Quench Immediate Thirst? [SMM Copper Concentrate Spot Weekly Review]

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       On February 21, the SMM Imported Copper Concentrate Index (weekly) was reported at -$10.8/mt, down $2.13/mt from the previous reading of -$8.67/mt. The pricing coefficient for 20% grade domestic trade ore was 93%-95%.

       During the week, the center of spot copper concentrate TC transactions deteriorated rapidly. According to SMM, the center of spot copper concentrate transactions last week remained around the mid-range of negative single digits. A trader sold 10,000 mt of Package copper concentrates to a smelter at a mid-to-high negative price, with shipment scheduled for late Q1 to early Q2, normal precious metal pricing terms, and QP set at M+5. By this week, several traders began offering spot positions for late Q1 at the beginning of the week. Early in the week, a smelter purchased 30,000 mt of clean ore from a trader at a mid-range negative single-digit processing fee, with QP set at M+5. However, after the mining company's tender results were announced on Tuesday, everything came to an abrupt halt, with many pre-offers being withdrawn and plans to re-offer next week. The tender results showed smelters winning bids at a mid-to-low negative $10 level, while traders won bids at a mid-to-low negative $30 level. These results shocked the market, far exceeding expectations.

       Recently, foreign media reported that Freeport-McMoRan requested the Indonesian government to allow it to export 1.3 million mt of copper concentrates until year-end. Indonesia has permitted Freeport-McMoRan to export copper concentrates but imposed higher export taxes as a penalty. According to SMM, feedback from a trader indicates that as of today, Indonesia has not yet approved copper concentrate export permits, and traders are still waiting for approval. Additionally, feedback from a mining company suggests that export permits for Indonesian copper concentrates have not yet been approved, but there is a high probability of progress in the near future. SMM believes that since last year, Indonesia has accumulated a significant inventory of copper concentrates that cannot be exported, leading to high business and financial costs for miners and traders. Meanwhile, domestic demand-side smelter construction projects have faced delays and production accidents, preventing demand from being released. Under dual pressures, the Indonesian government may temporarily lift the raw material export ban or wait until all three smelters are operational before reimposing the ban on copper concentrate exports.

       As of February 21, SMM's nine-port copper concentrate inventory stood at 783,200 mt, down 58,600 mt from the previous period, with the main reduction coming from Nanjing Port. This week, copper concentrate inventory at Nanjing Port decreased by 40,000 mt WoW.

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