Spot copper concentrate TC plunged to 8-month low as COVID-19 disrupted supply

SHANGHAI, May 9 (SMM) – Treatment charges for spot copper concentrate in China are on track for refreshing record lows due to persisting worries about supply sparked by coronavirus lockdowns disrupting production and shipments from major mines.

The SMM copper concentrate index, which assesses TCs for imported copper concentrate spot trades in China, stood at $54.21/mt for the week ended May 8, a low not seen since September 2019 and down more than $15/mt from the recent high of $71.47/mt notched in the week ended March 13.

Source: SMM

Spot copper concentrate TCs in China began its recent downtrend in mid-March, as major copper producing countries and regions including Peru and Chile in South America and Africa, imposed more stringent measures to prevent the spread of the COVID-19 pandemic.

Following the local governments’ coronavirus containment measures, copper miners reduced their operations and declared force majeure on shipments, sparking concerns over copper concentrate supply through at least Q2.

Copper mine production in the quarter ended March appeared to have been limitedly affected by the coronavirus, as combined output from major miners who have released their quarterly reports inched up from Q1 2019 and was moderately down from Q4 2019.

Source: Company reports, SMM

Major copper miners including BHP, Freeport, Glencore, Southern Copper, First Quantum, Antofagasta, Anglo American, Rio Tinto, Vale and Teck Resources, have issued their Q1 production figures and their copper output totalled 2.13 million mt, up more than 1% year on year but down more than 7% quarter on quarter.

The world’s largest copper miner—Chile’s state-owned Codelco—has yet to release its production data for Q1, which is estimated to be up 4.2% to 386,600 mt from a year earlier, according to data from Chile’s copper commission Cochilco.

While Codelco maintained its production and shipments according to its 2020 plan, Rio Tinto, First Quantum, Glencore and Vale have slashed their copper production guidance for the year due to COVID-19 disruptions.

Source: Company reports, SMM

Close to 400,000 mt of copper mine output has been wiped out from the 2020 guidance, and global output growth is expected to stall this year.

Copper concentrate TCs slipped to multi-year lows in 2019

Concerns that copper mine production increase would not be significant enough to catch up with the spike in demand from the massive smelting capacity expansion in China, knocked copper concentrate TCs to multi-year lows last year.

TCs for spot trades touched a low of $54/mt in the week ended September 12, while benchmark TCs for 2020 supply fell to the lowest since 2012 at $62/mt.