Mysteel's imported copper concentrate spot treatment charge (TC) index stood at -$245.33/dmt as of October 30, with recent declines slowing.
The copper concentrate market remained generally quiet last week, with limited activity in both spot transactions and offers. Market participants' attention was largely focused on annual long-term contract negotiations, while views on the market outlook remained divided. Some believed that frequent mine disruptions and tight copper concentrate supply would continue to weigh on TCs. Others argued that widespread smelter losses had prompted more voluntary maintenance and production cuts, dampening demand for copper concentrate, and thus there was limited room for further declines in TCs, which were expected to fluctuate at low levels in the near term.
Source: Mysteel
According to Mysteel's survey, a miner sold 40,000 tonnes of copper concentrate for December shipment to a smelter at -$248/dmt. A trader offered December-shipment cargoes at around -$245/dmt, while smelters countered at approximately -$240/dmt. Some market participants noted that current prices were already approaching the lower limit of smelters' affordability, leaving limited room for further declines.
China's average 98% smelting sulfuric acid price stood at Yuan 1,358/tonne on October 30, slightly falling from Yuan 1,369/tonne on October 23, as supply recovered while demand stayed moderate.
Domestic sulfuric acid prices are expected to remain generally stable this week, although further declines may occur in some regions, with significant regional disparities persisting. On the cost side, sulfur prices have entered a short-term consolidation phase following a sharp decline earlier. In addition, some low-priced pyrite supplies remain available, while prices of copper, lead and zinc concentrates remain high. Consequently, cost support is varied, putting further downward pressure on sulfuric acid prices. On the supply side, maintenance and production resumption schedules vary across regions. Acid producers in Anhui, Hunan, Shandong and Northeast China that previously suspended operations for maintenance are scheduled to gradually resume production this week. However, a producer in southern Fujian plans to undergo maintenance, partially offsetting the additional supply. Overall, domestic sulfuric acid supply is expected to increase slightly this week. On the demand side, market conditions are expected to remain weak. The phosphate fertilizer industry is in its traditional off-season, with procurement largely limited to essential requirements. Demand from sectors such as fine chemicals and titanium dioxide remains mixed, but the overall trend is slightly weaker. Overall, China's sulfuric acid market lacks upward momentum in the short term. Producers are likely to adjust prices according to regional supply conditions and downstream order intake, with sulfuric acid prices expected to edge down further.
Source: Mysteel
Moving forward, close attention is needed on the supply improvement in China's sulfuric acid market, as well as downstream acid demand recovery. Overall, sulfuric acid's supplement to copper smelting profits is unlikely to increase notably, leading Chinese smelters' operations to stay under pressure from extremely low TCs.
Written by Mingyuan Wang, wangmingyuan@mysteel.com
