CRU: Copper Concentrates – Key Themes for 2020

CRU’s Copper Concentrates Team operates out of offices across the globe, with representatives in Santiago, London, Singapore, Beijing and Sydney. We follow everything from anode slimes to sulphuric acid prices, to construct our view on the wider copper concentrates market. Below, we pick out 10 key themes that will steer the market in 2020.

Elevated risk of further disruptions in South America

A series of strikes and protests have elevated the risk of further mine disruptions in 2020. The major stumbling blocks in Chile include the many (>10) labour contract negotiations, and the risk of civil unrest erupting around the constitutional referendum (26th April).

Water shortages will impact mines across the globe

Severe droughts and increased water demand from copper miners will impact costs and output in parts of South America, Africa and Australia. ESG matters remain a major concern for all copper miners.

Less complex concentrates on the custom market

An unusual sequence of events caused levels of complex material to spike last year. However, we expect levels to return to normal in 2020. That said, how we define complex concs could be affected by tighter import restrictions in China, that were floated and dropped last year.

Smelter closures in China as losses start to stack up

The wave of new smelter projects that have come online in China, over recent years, has pushed the concentrates market into deficits. Chinese smelters will compete for tonnes, but declining TCs, weak acid prices and premiums, as well as rising costs, will prompt closures.

CSPT will help to consolidate industry

CSPT will help to consolidate the Chinese smelting industry as the market tightens. The 10-member group is already vetting new members and may look to snap up distressed assets. The group will be more resilient as the market tightens with its coordinated strategy.

SOURCE CRU