Mysteel's imported copper concentrate spot treatment charge (TC) index stood at -$224.47/dmt as of September 18, while market trading activity slowed amid persistent differences between buyers and sellers. Pressure on smelting profits prompted some smelters to slow procurement, while most traders expect spot TCs to maintain a downward trend, with transactions continuing to favor index-based pricing. Spot TCs are expected to remain extremely low in the short term.
Source: Mysteel
According to Mysteel's survey, a miner sold 10,000 tonnes of October-shipment BVC (Buenavista del Cobre) off-spec concentrate to a trader at -$290/dmt, with gold content below 1 g/t and therefore non-payable. In addition, a 10,000-tonne November-shipment concentrate from Antamina A was concluded at -$353/dmt, also with gold content below 1 g/t and therefore non-payable, with QP at M+2. A 10,000-tonne December-shipment cargo of Quebrada Blanca (QB) was concluded at -$385 to -$390/dmt. Meanwhile, a trader sold a 10,000-tonne cargo to a smelter at -$233/dmt.
China's average 98% smelting sulfuric acid price stood at Yuan 1,452/tonne on September 18, falling from Yuan 1,519/tonne on September 11, with the supplement to copper smelters' profits gradually weakening.
China's sulfuric acid prices are expected to continue declining this week, with limited rebound anticipated ahead of the Mid-Autumn Festival and National Day holidays. On the supply side, sulfuric acid producers' operating rates are expected to remain broadly stable, and market supply is likely to remain relatively ample. On the demand side, the phosphate fertilizer sector is expected to maintain some restocking demand ahead of the holidays. Demand from the chemical sector is mixed but generally trending slightly upward, but its support for overall demand will be limited. Cost-side support is also weakening. Sulfur prices have fluctuated downward amid cautious market sentiment, while pyrite prices are declining in line with weaker sulfuric acid prices. Although copper, lead and zinc ore prices remain elevated, they are unlikely to provide upside support. Following successive sulfuric acid price cuts earlier, market purchasing sentiment has weakened, with downstream enterprises and traders largely adopting a wait-and-see approach and showing limited willingness to take delivery. Meanwhile, as the Mid-Autumn Festival and National Day holidays approach, expectations of transportation restrictions are increasing, and sulfuric acid producers remain under pressure to reduce inventory ahead of the holidays. Overall, domestic sulfuric acid prices are expected to continue declining this week.
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
