Can the successive relaxation of export policies for copper concentrates from Indonesia and Panama save the Chinese market? [SMM Analysis]

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As is well known, since the end of 2023, the global copper concentrate market has experienced a serious imbalance in supply and demand, and the shortage of spot supply of copper concentrate in China has become increasingly severe. This is reflected in the sharp decline of the SMM copper concentrate spot index. On March 14th, the SMM imported copper concentrate index (weekly) reported -15.92 USD/DMT, a decrease of 0.09 USD/DMT from the previous period.

On March 18, 2025, the General Administration of Customs of China announced the monthly import data of copper concentrate in China for January and February 2025: in January 2025, China imported 2.58 million dmt cu cons, increased of 0.32% month on month and 2.98% year-on-year; In February 2025, China imported 2.18 million dmt cu cons, decreased of 13.83% compared to the previous month, and a cumulative increase of 1.13% year-on-year. If the export of Indonesian copper concentrate policy goes smoothly, SMM expects China maybe import 2.25-2.3 million dmt cu cons in March 2025.

According to SMM, the Indonesian government announced on Monday that it has issued a 6-month copper concentrate export license to Freeport Indonesia. Today, Freeport Indonesia announced that it has obtained an export license for 1.27 million dmt of cu cons from the Indonesian Ministry of Trade, which means that ships carrying Freeport copper concentrate from Papua port are allowed to start shipping. Meanwhile, on March 13th, the President of Panama announced that he had approved the export of 120,000 dmt of Cobre Panama cu cons.

The seemingly double happiness of favorable policies can alleviate the shortage of China's copper concentrate spot market, especially today's market rumors that BHP's Escondida tender result is -25.5 USD/DMT for smelters and -53 USD/DMT for traders, adding frost to the already deteriorating spot market. However, SMM believes that the "double happiness" policy can have a stabilizing effect in the short term, but in the long run it is a drop in the bucket and cannot reverse the rapidly deteriorating spot market. On the one hand, the proportion of copper concentrate imported by China from Indonesia in previous years has only been 1% -3%. In 2024, the amount of copper concentrate imported by China from Indonesia was 550,000 dmt, accounting for only 1.95%. Moreover, Grasberg's main customer countries are Japan, South Korea, and European countries. Although Indonesia's copper concentrate inventory is staggering, with nearly 1.3 million dmt, such a large amount is basically unrelated to China. On the other hand, the Cobre Panama copper concentrate with 120,000 dmt of inventory in Panama actually has owner. The 120,000 dmt of copper concentrate will be sent to the Onsan smelter in South Korea and three smelters in Japan, and will not enter the Chinese market.

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