As the world's largest demand country for copper concentrate, China has gradually increased its import of copper concentrate which has exceeded 75%. China imported 20.803 million tonnes of copper concentrate from January to October 2022, with an increase of 8.5% year on year.
China imported copper concentrate in two ways: independent procurement and centralized procurement. The latter has been chosen more with increasing enterprise mergers and reorganizations, such as Jiangxi Copper, Zijin Mining, Tongling Nonferrous, etc. In addition to the scale effect, centralized procurement is also more flexible. In unplanned events, the more centralized procurement in a group, the more flexible to internally adjust the supply of raw materials among refineries under the group to deal with risks, particularly the risk of unstable supply of seaborne copper concentrate which accounts for 87% of China's imports.
It is estimated that six groups operating multiple smelters choose centralized purchase, according to Mysteel's survey of China's top 10 copper concentrate importing groups whose smelting capacity accounts for 75% of the total capacity. Wherein, China copper, coordinating its six smelters' purchase of imported copper concentrate with a 4 million tonnes annual volume, has the highest degree of intensive raw material procurement at present. With the launch of the Hongsheng project, Daye Nonferrous Metals has increased its purchasing of imported copper concentrate to 2.5 million tonnes a year, ranking second among all purchasing groups.
The centralization of copper concentrate procurement has increased the influence of enterprises on the market and their bargaining power.
The centralization of mine sales was earlier than that of smelting procurement. Leading miners such as Freeport-McMoRan and BHP coordinate sales of copper concentrate at their mines, while China's purchases of copper concentrate are increasingly centralized.
Written by Edenlis Huang, huangting@mysteel.com
Edited by Paula Xu, xuzhongping@mysteel.com
