Raw material imports are not optimistic, and a storm is brewing [SMM analysis]

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Copper concentrate data for May 2025 generally fell short of market expectations, particularly the import data for copper concentrates, which pulled back significantly from the historical high in April: The import data for May has been released, with China importing approximately 2.4 million mt of copper concentrates in May, down 18.09% MoM and up 5.8% YoY, slightly lower than the average monthly imports of 2.485 million mt of copper concentrates in China from January to May 2025. In May, China imported 69,000 mt of copper anodes, down 6.48% MoM and 30.56% YoY, higher than the average monthly imports of 63,000 mt of copper anodes in China from January to May 2025. In May, China imported 18,500 mt of copper scrap, down 9.55% MoM and 6.63% YoY, slightly lower than the average monthly imports of 19,200 mt of copper scrap in China from January to May 2025.

The supply of imported raw materials fell short of expectations across the board, putting pressure on the raw material supply for Chinese smelters, which may also imply that the previous record-breaking supply of imported raw materials was just a "flash in the pan." Additionally, China's copper concentrate port inventory is not only at a low level for the year but also shows a continuous downward trend. The future supply of raw materials is not expected to be particularly optimistic. This is unfavorable for the ongoing mid-year negotiations on copper concentrates, effectively adding leverage to the sellers. The unoptimistic import data seems to "foreshadow" a mid-year negotiation result that falls below expectations.

According to SMM, the second round of mid-year negotiations between Chinese smelters and Antofagasta commenced on Thursday and Friday of 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 quote, and Chinese smelters did not explicitly accept the -$15 result, with a third round of negotiations scheduled to commence next week.

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