Preliminary results of mid-year negotiations fall short of expectations; the impact of the KK mine accident may have been underestimated. [SMM Weekly Review of Spot Copper Concentrates]

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       On May 30, the SMM Imported Copper Concentrate Index (weekly) was reported at -$43.56/dmt, an increase of $0.72/dmt from the previous -$44.28/dmt. The pricing coefficient for 20% grade domestic trade ore ranges from 93% to 95%.

       Despite several Chinese smelters engaging in mid-year negotiations with Antofagasta in Shanghai during the week, it did not hinder the recovery of activity in the copper concentrates spot market. A trader sold 10,000 mt of clean ore with a June shipment period to smelters at a low price of -$40/dmt and another 10,000 mt of high-gold ore with a July shipment period at a mid-to-low price of -$40/dmt, both with a QP of M+1/5. A smelter purchased 10,000 mt of South American clean ore from a trader at a mid-to-low price of -$40/dmt, with a July shipment period and a QP of M+1/5. The gold Payable was subject to a full deduction for content below 0.3g. A trader was offering 20,000 mt of South American clean ore with a July shipment period and a QP of M+1/5, with normal gold and silver Payable terms. Previously, the tender results of Anglo American were announced, with a smelter winning a bid for 10,000 mt of QVC at a mid-range price close to -$40/dmt and a trader winning a bid for 10,000 mt of Los Bronces at a price close to -$90/dmt, both with a QP of M+3 and a shipment period in H2 2025.

       Following the first round of negotiations by Japanese companies last week, Chinese smelters commenced mid-year negotiations with Antofagasta this week. According to SMM, in the first round of negotiations this year, miners had already offered a price in the mid -$15/dmt range to smelters. This figure was significantly lower than the $0/dmt that had circulated in the market in late April.

       According to foreign media reports, seismic activity at the Kakula underground mine continued intermittently over the past few days, and underground mining operations were suspended again on May 25, 2025. The earthquake caused fractures in underground water veins, leading to an increase in water inflow at the Kakula underground mine. A detailed drainage plan is currently being formulated, including the procurement of additional pumping equipment to enhance pumping capacity and allow for surface drainage. According to SMM, production activities at Kakula may be affected for up to six months. The KK mine is processing low-grade copper ore piled up in the mining area to maintain normal shipments and has not declared force majeure at this time.

       SMM's copper concentrates inventory at nine ports was 795,900 mt as of May 30, an increase of 15,600 mt from the previous period. The main increase came from Fangchenggang, where copper concentrates inventory increased by 70,000 mt WoW this week.

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