Copper mine supply growth will slow down 

The market is highly consistent with the expectation of copper concentrate supply this year, and both believe that the supply growth of copper mines will slow down. Specifically, overseas mines will increase the supply of copper concentrate of about 390,000 tons, mainly from: Tongling Nonferrous Metal Mine, which is expected to be completed in the first quarter of 2019, trial production in the second quarter, and increase of 9.6 in copper concentrate. 10,000 tons; Chile's national copper industry Chuiquicamata copper mine, due to transfer to underground mining, copper concentrate is expected to increase 89,000 tons; South Copper's Toquepala, is expected to increase production of 85,000 tons; BHP Billiton's OlympicDam copper mine, is expected to increase production 5.4 Ten thousand tons. From the increase in copper concentrates, it has slowed down compared to 2018. 

Based on the increase in production of overseas mines in 2019, it can be seen that the supply growth of copper concentrates has slowed down in 2019, and there is a risk of supply shortage, which was also verified in the long-term negotiation of copper concentrates in 2019. In mid-November 2018, Jiangxi Copper and Antofagasta reached a 2019 copper concentrate long-term negotiation, signing TC/RC at US$80.8/ton and 8.08 US cents/lb, down US$1.45/ton from US$82.25/ton in 2018. 

Waste copper policy risk needs attention 

Judging from the situation in China, after the implementation of the policy of restricting the import of scrap copper in the two dimensions of scrap copper import qualification and scrap copper impurity content in 2018, the scrap copper import contracted significantly compared with previous years, and was lower than 100,000 tons. In 2019, the import of “seven kinds of waste” will be banned. According to the statistics of 10 customs codes, the amount of scrap metal in seven categories accounts for about 16% of the total imported copper in 2018, which is more than the proportion of 2% in 2017. reduce. Due to the domestic scrap copper structure, the supply of imported scrap copper accounts for an absolute proportion. Therefore, the supply of scrap copper in the Chinese market in 2019 will continue to be tightened due to the ban on imports of the “seven wastes”. However, it is worth noting that the news broke out at the beginning of the new year, saying that the relevant departments are studying the development of quality standards for the recovery of copper and recycled aluminum raw materials. The recycled copper and recycled aluminum raw materials that meet the relevant national product quality standards are not solid waste. The management of ordinary free import goods makes this year's supply of scrap copper full of uncertainty. 

Expected increase in refined copper growth 

In 2019, China's domestic smelters plan to expand capacity by 980,000 tons, which is shrinking from the 1.17 million tons of new refining capacity in 2018. From the perspective of production time distribution, new capacity is released in the first quarter and fourth quarter. Considering the shortage of copper concentrate supply in 2019, the processing fee is not expected to be high. Although the smelter is unlikely to take the initiative to reduce production, the actual production enthusiasm is greatly affected. The release of refined copper production in 2019 will be affected to some extent. inhibition. For the upstream supply of copper, the market expectation is relatively consistent, and the tight judgment is given. The more consistent the expectation is, the more the potential risk will appear, the stronger the demand will be corrected, and the biggest risk in the upstream is the waste copper.

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Shirley N.//SMC Editor