As the year draws to a close, the fundamental dynamics of the global copper concentrate supply and demand are largely clear. Based on the latest global copper concentrate production and smelter operations, SMM estimates this year's copper concentrate supply-demand balance to be approximately a deficit of 170,000 metal tonnes. This outcome is more favorable than the previously projected deficit of 530,000 metal tonnes.
Looking ahead to next year, SMM forecasts that the global copper concentrate supply-demand imbalance will widen, with the deficit expected to expand to 330,000 metal tonnes. On the supply side, SMM anticipates a global increase of 570,000 metal tonnes in sulfide copper concentrate production for the coming year. Key contributors include the continued production recovery from Indonesia's Grasberg and the Kamoa-Kakula copper mines; the expected resumption of production at Cobre Panama in the fourth quarter; the restoration of copper concentrate output at QB II following the completion of its tailings storage facility; the commencement of production at Argentina's new Josemaria project; incremental output from the expansion at Tibet Julong Copper; and the supply-side recovery supported by the second-phase expansion of the Mirador mine. On the demand side, beyond the ramp-up of new blister copper production capacity from projects like Jinxin Copper and Hunan Valin's Weihai smelter this year, additional blister copper production increments are expected next year from projects such as the second phase of Chifeng Jintong and the first phase of Shenghaikehua. Despite the new project startups and existing project ramp-ups, SMM predicts that smelters worldwide will experience varying degrees of reduction in blister copper capacity utilization rates due to the rapidly deteriorating copper concentrate market. Overall, global blister copper production is projected to increase by 510,000 metal tonnes next year.
Regarding the annual contract negotiations, this year's global copper concentrate supply-demand balance has improved significantly compared to earlier expectations. Correspondingly, the progress of the year-end Benchmark (BM) negotiations for 2025 has also been better than anticipated. While the market initially widely expected the BM result to fall between -$10 to -$20 per tonne, SMM has learned that during the second round of negotiations, smelters reportedly offered +$11, while Antofagasta quoted -$7.5. SMM expects the final negotiation result is highly likely to settle within the range of $0 to -$5 per tonne, with a strong possibility of the outcome being $0.
