![]() Smelters generally prefer to buy standard clean copper concentrates when supply is abundant, as the cost to remove impurities can be higher than the TC charge, a smelter source said. Large-size smelters bid much higher than offers for clean copper concentrates during Q2 amid ample supply of non-standard copper concentrates, and traders preferred to sell to small- to medium-size smelters. Kamoa concentrates from the Democratic Republic of Congo were also purchased by some Chinese smelters in the spot market due to Las Bambas shipment delays. ![]() ![]() In addition, Mongolian-origin copper concentrates were heard sold to non-traditional buyers in south China in Q2, while Grassberg concentrate with 700 ppm fluorine content was sold to Chinese smelters. Platts observed 220,000 mt of blended copper concentrates traded in the spot market in Q2, up from 115,000 mt in Q1. The shortage of standard clean copper concentrate has prompted many smelters to turn to blended or non-standard copper concentrates to fulfill production requirements. Traders were more active in the spot market in Q2, with 33% of spot trades observed to have been concluded by traders over April-June, up from 25% over January-March. The Platts producer-trader differential was assessed at minus $14.60/mt June 29, the widest to date in 2022. Recovering short physical positions to deliver term contracts, and securing clean concentrates to sell together with blended or non-standard copper concentrates, have resulted in widening spreads between smelter and trader transaction levels. The limited availability of clean copper concentrate since Xiangguang resumed production in May has prompted traders to bid more aggressively in the spot market. S&P Global Commodity Insights Metals JTrader-smelter bid spread widens Do you think spot copper concentrate treatment charge will fall below $70/mt in Q3? Concentrate charges are expected to bottom in Q3 before supply picks up again in Q4, sources said.ĭemand and supply of #copper concentrate is expected to grow in Q3. Platts daily clean copper concentrate treatment charge touched a three-month low June 29 at $73/mt CIF China, and was down 14% from April 18, S&P Global Commodity Insights data showed. As a result, some term contracts could not be delivered to buyers in Q2, and both traders and smelters were observed restocking clean copper concentrates due to shipment delays or the cancellation of planned term cargoes.Īlthough anticipated new copper supply, such as from Peru's Quelleveco mine, could bring some relief to the market, its first shipment has been delayed to August-September due to production difficulties from an initial target of July. ![]() Strikes in Peru impacted production at MMG's Las Bambas mine and Southern Copper' Cuajone and Toquepala mines. On the supply side, water shortages and deteriorating ore grades impacted copper production in Chile in the first half of the year, resulting in the country's copper concentrate exports falling 13% year on year over January-May. High sulfuric acid prices that supported smelter profit margins in Q2 are expected to continue in Q3, and current market expectations are that smelter production rates will remain high, market sources said. Major Chinese producer Yanggu Xiangguang Copper, with 500,000 mt/year capacity, resumed production in second-half May and was running at 90% of capacity in June, while a number of other Chinese smelters restarted production in June after seasonal maintenance.Īnother major Chinese smelter, Daye Nonferrous, with 600,000 mt/year of capacity currently, is expected to start a new 400,000 mt/year production line in August, adding further procurement pressure. Several Chinese smelters restarted idled production capacities in the second quarter, significantly boosting demand for copper concentrates. TC/RCs are fees paid to smelters by mines for converting copper concentrate to copper cathode, and falling TCs signal that copper concentrate supply is tight. Receive daily email alerts, subscriber notes & personalize your experience.Īsian demand for copper concentrates will likely be supported in the third quarter by healthy margins and an increase in smelter production capacity in China, while clean copper concentrate output is expected to lag consumption, placing downward pressure on the country's treatment and refining charges.
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