Mysteel's imported copper concentrate spot treatment charge (TC) index stood at -$211.5/dmt as of September 11, continuing falling week on week, indicating extreme supply tightness, with the downward trend unlikely to reverse in the short term. Meanwhile, falling sulfuric acid prices further squeezed smelter profitability, prompting smelters to focus their copper concentrate purchases mainly on meeting immediate production needs. Most traders favored spot index-based deals, with current offers generally at $25-30/dmt below the index.
Source: Mysteel
According to Mysteel's survey, one mine sold 5,000 tonnes of copper concentrate to a trader at -$270/dmt, while another sold 22,000 tonnes to a trader at -$300/dmt. In addition, a trader sold 30,000 tonnes of copper concentrate to a smelter at $25/dmt below spot index. Market sources also indicated that a trader sold 40,000 tonnes to a smelter at -$220/dmt.
China's average 98% smelting sulfuric acid price stood at Yuan 1,519/tonne on September 11, falling from Yuan 1,584/tonne on September 4, with the supplement to copper smelters' profits gradually weakening.
China's sulfuric acid market is expected to remain weak this week, with prices continuing to decline. Cost support will be limited. While sulfur prices fluctuate and market sentiment stays cautious, pyrite prices have followed the downward trend in sulfuric acid prices. Although metal ore prices, including copper, lead and zinc, remain elevated, the overall cost support for sulfuric acid has softened. On the supply side, sulfuric acid output is expected to remain relatively stable this week, with no large-scale maintenance shutdowns or production cuts planned. On the demand side, the phosphate fertilizer market will remain cautious, with limited trading activity. Demand from the chemical industry is mixed, with some segments seeing modest growth, but this is unlikely to provide significant support for overall sulfuric acid demand. Recently, continued declines in sulfuric acid prices have weakened downstream purchasing sentiment and reduced buying interest. In addition, with the Mid-Autumn Festival and National Day holidays approaching, transportation restrictions may hinder sulfuric acid circulation. Overall, sulfuric acid prices are expected to continue declining ahead of the holidays, with little prospect of a price rebound in the short term.
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
