Chile's Short-Term Disruptions Unlikely To Change Ample Supply, SMM Imported Copper Concentrate Index Rose Further

As of last Friday May 12, the SMM Imported Copper Concentrate Index (Weekly) stood at $86.88/mt, $1.41/mt higher than May 5. The spot market was quiet during the week as most market participants were preparing for the LME meeting in Hong Kong to be held this week, muting trading. Traded TCs of clean seaborne ore scheduled for July and August between mines and smelters stood at $85/mt. Offers were ample. Offers of traders for clean seaborne ore scheduled for June-August stood at $85/mt, and counteroffers were $91-92/mt. The market was still awaiting guidance from the results of Antofagasta's mid-year long-term contract negotiations with some Chinese smelters. The price coefficient of Cu 20% domestic ore stood at 88.5-89.5%.

According to foreign media reports, the mayor of Calama, Chile, has called for demonstrations against rising crime in the city, with protesters targeting major highways, Calama airport and blocking schools and public transport. The protests and demonstrations that began on April 21 not only prevented mine workers from working in the daytime, but also prevented night shift workers from returning home. The mines affected by the protests and demonstrations included Chuquicamata (copper output stood at 268,300 mt with metal content in 2022), Gabriela Mistral (copper output stood at 109,400 mt with metal content in 2022), Ministro Hales (copper output stood at 152,200 mt with metal content in 2022) and Radomiro Tomic (copper output stood at 301,000 mt with metal content in 2022). The key equipment and infrastructure of Codelco mines may also be at risk. SMM understood that the protests and demonstrations in Chile that started in late April had a limited negative impact on the production at mines, and it is expected that the protests and demonstrations will not last for a long time. The short-term disruption will hardly change the ample supply of copper concentrate market.

SMM expects the imported copper concentrate TCs will continue to rise in the second quarter. Chinese smelters, including China Daye Non-Ferrous Metals, Xinjiang Wuxin Copper Industry, Jiangxi Copper Headquarters, Tongling Jinguan, and Qinghai Copper, will undertake concentrated maintenance in late March. This has weakened demand for spot copper concentrate. Meanwhile, port capacity in America will continue to recover. The disruption rate for overseas mines fell and Quebrada Blanca Phase 2 in Chile has been commissioned, growing supply. The inventory of copper concentrate at five Chinese ports was 546,000 mt in the week ending May 12, a growth of 11,000 mt from a week earlier.

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