Copper Concentrate TCs and RCs to Face Further Pressure in Q3 due to Tight Supply and Growing Demand

SHANGHAI, Jul 5 (SMM) - Demand for copper concentrate in Asia is likely to be supported in the third quarter by high margins and increased Chinese smelter capacity, while clean copper concentrate is expected to be in tight supply, putting downward pressure on TC/RCs charged on Chinese smelters.

In the second quarter of this year, several smelters in China restarted idle capacity, boosting demand for copper concentrate substantially.

High sulphuric acid prices, which supported smelter profit margins in the second quarter, are expected to continue in the third quarter, market sources said, with smelter capacity is expected to remain high.

On the supply side, water shortages and deteriorating ore grades impacted Chile’s copper production in the first half of the year, causing the country’s copper concentrate exports to drop by 13% year-on-year in the January-May period.

The strike in Peru affected production at MMG's Las Bambas copper mine and Southern Copper's Cuajone and Toquepala mines. As a result, some long-term orders could not be delivered in the second quarter. Traders and smelters were replenishing copper concentrate inventories due to delayed shipments or cancellation of long-term orders.

While anticipated new copper supplies such as the Quelleveco mine in Peru may bring some relief to the market, its first copper shipments have been delayed until August-September due to production difficulty in July.