Mysteel's clean copper concentrate spot treatment charge (TC) index, CIF China, reached -$107.2/dmt on May 29, dropping from -$106.2/dmt on May 22, with the pace of decline slowing.
Source: Mysteel
Copper concentrate TCs continued to decline last week, with spot trading subdued. Market attention is focused on the progress of mid-year negotiations, and TC fluctuations narrowed. Looking ahead, TCs are expected to fluctuate within the range of -$105/dmt to -$110/dmt. Routine procurement by smelters to support production is expected to provide ongoing demand support, while differences in price expectations and continued negotiations between buyers and sellers are likely to persist.
According to Mysteel's survey, a trader recently sold 10,000 tonnes of copper concentrate for July shipment to a smelter at an overseas index minus $5/dmt. Another parcel of bundled concentrates, including mixed concentrates, was also traded at the overseas index minus $5/dmt. Meanwhile, market sources reported that a trader offered 100,000 tonnes of bundled concentrates, including mixed concentrates, at an overseas index minus $10/dmt.
China's average 98% smelting sulfuric acid price stood at Yuan 1,727/tonne on May 29, rising slightly from Yuan 1,713/tonne on May 22 and continuing complementing copper smelters' losses due to excessively low TCs. This week, sulfuric acid prices are expected to remain supported by high production costs, amid declining supply and demand.
Source: Mysteel
The impact of by-product sulfuric acid prices on the copper supply chain is steadily increasing amid current extremely low TCs. Following the implementation of China's sulfuric acid export ban in May, sulfuric acid prices have shifted from a rapid upward trend to high-level fluctuations, driving market concerns. Overall, as sulfuric acid producers' concentrated maintenance periods gradually conclude and exported sulfuric acid volumes return to the domestic market, the supply-side may exert limited downward pressure on China's sulfuric acid prices in the future. Additionally, weakening demand for phosphate fertilizers is likely to further constrain acid consumption and dampen prices. However, sulfur supply is expected to remain tight and prices elevated, continuing to provide strong cost support for sulfuric acid. Consequently, sulfuric acid prices are unlikely to significantly drop, and will continue to support profit margins for Chinese copper smelters.
Written by Mingyuan Wang, wangmingyuan@mysteel.com
