MT: TC for Copper Concentrate Holds Steady, Trading Improves
Summary:The upbeat existing home sales in the US and a turnaround of HSBC’s China manufacturing PMI reported last week drove LME copper to rally after dipping to a low of USD 7,227/mt.
SHANGHAI, Aug. 26 (SMM) – The upbeat existing home sales in the US and a turnaround of HSBC’s China manufacturing PMI reported last week drove LME copper to rally after dipping to a low of USD 7,227/mt. Domestic copper prices consolidated around the 120-day moving average, and saw upward room. Copper smelters became more active in purchasing copper concentrate after the price hike, but domestic mines abstained from selling, holding prices firm.
Last week, spot TC for copper concentrate was little changed at USD 80/mt, but trading was more active. Despite the current low SHFE/LME copper price ratio, smelters are optimistic towards spot TC, preferring to buy high-quality ore. In addition, smaller smelters also increased ore purchases, with fewer requirements for higher grades.
Last week, prices for copper concentrate (20%) were 85-86% of refined copper prices, and 87.5% of refined copper prices for copper concentrate (25%). According to the National Bureau of Statistics, China’s domestic copper concentrate output is increasing, but according to SMM sources, goods from some mines are still being held back.
Despite bullish mood to TC for copper concentrate among smelters, China’s reliant on foreign resources reflected by rising concentrate imports and disputes over the OT copper mine in Mongolia which results in lower expectation for copper concentrate output growth globally may constrain the increase in TC.
