Why Has This Year's BM Negotiation Process Been So Slow? [SMM Analysis]

The 2025 copper concentrate BM negotiations began in November. This year's negotiations differ from previous years in two main aspects: firstly, Freeport is not participating in the negotiations due to the new smelter construction in Indonesia and copper concentrates export ban; secondly, this year's BM negotiations are more challenging and progressing slowly.

According to the usual pace, BM results would typically be released around early December, with negotiations reaching the third or fourth round. However, this year, the second round of negotiations has not yet taken place, and neither smelters nor miners are in a hurry to start the next round of BM negotiations. As a result, the negotiations for long-term contracts of imported blister copper, domestic trade copper cathode, and imported copper cathode have been delayed. According to SMM, this week, Antofagasta reported low $10 to five copper smelters, following $10 in the first round, but did not initiate the second round of invitation negotiations. Additionally, there was no response from the smelters.

So why are this year's BM negotiations so tense and progressing so slowly? SMM believes that this year's situation is different from previous years. Chinese smelters are facing a severe supply deficit for copper concentrates in the coming years. Miners are inclined to quote BM prices above $10, but this result is unacceptable to smelters, as accepting this figure would result in significant losses. The difficult progress in this year's negotiations is due to the substantial differences in expectations between the two parties. If the price differences between buyers and sellers are relatively small, the bargaining frequency is relatively fast. However, if the differences are too large, the interest and motivation for price negotiation diminish. Additionally, the negotiations between Chinese smelters and Antofagasta do not have an expiry date, but the contract term is until the end of December. SMM expects that if the BM cannot be released by the end of December, it will not be finalised until January or February of the following year.