No progress was made in the second round of mid-year negotiations, and production cuts at overseas smelters became increasingly significant [SMM Weekly Review of Spot Copper Concentrates]

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On June 20, the SMM Imported Copper Concentrate Index (weekly) was reported at -$44.78/dmt, a decrease of $0.03/dmt from the previous -$44.75/dmt. The pricing coefficient for 20% grade domestic trade ore ranges from 94% to 96%.

In the spot market, the tender results of a major miner were announced during the week, with the tender price for 40,000 mt of standard clean ore to smelters set at a median of -$40/mt, with shipment scheduled for August. A trader sold 10,000 mt of bundled clean ore to a smelter at a median price close to -$40/mt, with loading scheduled for August. A smelter purchased 30,000 mt of bundled ore (clean ore and mixed ore) from a trader at a price in the mid-to-high -$40/mt range, with copper grades starting from 15% for pricing, and full pricing after a 0.3 deduction for Au. The tender results for Grupo Mexico's Cananea were announced, with a winning bid price of -$140/mt. KGHM launched a tender for 10,000 mt of Sierra Gorda, with shipment scheduled for September-October and the bid closing on June 23. Codelco launched a tender for 50,000 mt of Rajo Inca, with shipment scheduled from June to September at 10,000 mt per month, and the bid closing on June 23.

According to SMM, after multiple delays in commissioning, India's Adani copper smelter resumed commissioning on June 16. However, due to the previous delays, there is a risk of cancellation of its long-term contract for copper concentrate raw material supply from South America. The Adani smelter has an annual capacity of 500,000 mt.

The second round of mid-year negotiations between Chinese smelters and Antofagasta commenced on Thursday and Friday this week, with three smelters participating on Thursday and two on Friday. The outcome of the negotiations was that Antofagasta still insisted on a -$15/mt offer, while Chinese smelters did not explicitly accept the -$15/mt result, and a third round of negotiations will commence next week.

According to an official announcement from JX Nippon Mining & Metals Corporation, in light of the declining profitability of copper concentrate smelting in recent years, the company is actively promoting the expansion of the proportion of high-margin recycling raw materials. However, due to the significant deterioration in ore purchasing conditions, the group has begun to consider implementing production cuts at its operating smelters. Meanwhile, in response to the rapidly increasing demand for raw materials for advanced materials such as semiconductor materials and the enhancement of circular economy awareness, there is a need to further accelerate the transformation of the business structure from concentrate smelting to recycling smelting. According to SMM, this production cut plan involves two smelters, including Saga, with a production cut of around 10%.

SMM's copper concentrate inventory at nine ports was 712,100 mt on June 13, a decrease of 100,700 mt from the previous period. The main reductions came from Fangchenggang Port and Huludao Port, with copper concentrate inventory at both ports decreasing by 40,000 mt MoM this week.

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