Mysteel's clean copper concentrate spot treatment charge (TC) index stood at -$194.2/dmt as of August 21, down by $12.95/dmt week on week.
The copper concentrate market continued to be characterized by tight mining supply but strong smelter demand last week, with spot treatment charges (TCs) continuing to decline. Smelters procured based on rigid demand, while traders remained relatively firm on offers, showing limited willingness to sell at fixed TCs and a stronger preference for index-linked pricing with deductions. Overall, market participants remained cautious, expecting further downside in spot TCs.
Source: Mysteel
According to Mysteel's survey, a trader sold 40,000 tonnes of clean copper concentrate for Q4 shipment to a smelter at -$198/dmt. Another trader sold 10,000 tonnes of clean copper concentrate for October shipment to a smelter at -$190/dmt.
China's average 98% smelting sulfuric acid price stood at Yuan 1,615/tonne on August 28, falling from Yuan 1,647/tonne on August 21, with the supplement to copper smelters' profits gradually weakening.
Sulfuric acid prices are likely to continue declining this week. On the cost side, sulfur prices accelerated their decline last week, weighing on market sentiment. However, spot sulfur availability will remain relatively tight, offering limited support to sulfuric acid prices. Pyrite prices have also shown clear signs of weakening, while prices of metal ores such as copper, lead and zinc will remain elevated. Overall cost support has weakened and is unlikely to provide an effective boost to sulfuric acid prices. On the supply side, major domestic sulfuric acid producers are expected to maintain their current operating rates this week, keeping market supply relatively ample. Some producers hold relatively high inventory and are becoming more willing to accelerate sales. However, with insufficient demand follow-through, inventory decline will remain slow. Demand performance may stay clearly differentiated across sectors. The phosphate fertilizer market is characterized by strong cautious sentiment, with new orders remaining limited. However, given the relatively low operating rates earlier, a modest recovery is expected, which could support sulfuric acid demand. Demand from downstream chemical industries is generally showing a slight upward trend, but the increase remains limited and insufficient to offset overall market weakness. Meanwhile, continued declines in domestic sulfuric acid prices recently have further weakened market confidence, prompting downstream buyers to adopt a more cautious procurement approach, with pressure on prices.
Overall, bearish factors are likely to remain dominant in the domestic sulfuric acid market this week. Prices are expected to continue edging lower, while market trading activity is likely to remain subdued.
Source: Mysteel
Recently, sulfuric acid prices have continued to decline amid weak demand and recovering supply, gradually reducing the contribution to copper smelters' profitability. Some smelters have already increased sulfuric acid output to secure profits. Moving forward, attention should be paid to the risk of a sharper decline in sulfuric acid prices, which could further weigh on copper smelters' profitability.
Written by Mingyuan Wang, wangmingyuan@mysteel.com
