SMM Imported Copper Concentrate Index to face downside pressure as inquiries surge

As of August 18, the SMM Imported Copper Concentrate Index (Weekly) stood at $93.35/mt, $0.68/mt lower than a week earlier. The spot trades of copper concentrate continued to be quiet last week, even as inquiries from many smelters for traders’ clean ore scheduled in the fourth quarter increased significantly during the week. The price coefficient of Cu 20% domestic ore stood at 88.5-89.5%.

According to SMM analysis, the SMM Imported Copper Concentrate Index will enter a downward track in the near term. There were many unexpected inquiries from some smelters in China at the end of the third quarter. And concentrated disruptions to overseas copper concentrate supply may emerge in the fourth quarter. That may turn the brief decline in the SMM Imported Copper Concentrate Index into a downward track.

In the spot market, there were deals of clean ore between smelters and traders during the week, pending finalisation of contract terms. Recently, a number of smelters in China have increased inquiries for clean ore in order to prepare for technical upgrading projects, improve the quality of raw materials or restock inventories for new expansion projects. SMM understood that the inquiries of Chinese buyers stood at $95/mt, while the offers of ore traders were in the low $90s. Most of the shipments were scheduled in the fourth quarter. There was a deal of 10,000 mt of copper concentrate occurring between US Ray Copper Mine and a trader during the week, with a TC of $75/mt.

According to SMM survey, this year's technological upgrading, restart as well as new and expansion projects at China's smelters are in line with market expectations. Some smelters have cancelled their original maintenance plans for the second half of the year. According to SMM survey, the technical upgrading project of a smelter in central China may be completed in October. The copper smelting technology innovation and upgrading project of Baiyin Nonferrous is expected to be put into operation at the end of August, and feeding will begin in October. A smelter in north-east China has completed the first annual maintenance and will commence the second maintenance (technical upgrading at smelting line) at the end of the year. The market expects that the phase II project of a smelter in south China will start feeding at the year-end.