Demand for imported copper concentrate hard to decline in Q2 2017

Asian Metal: Mr. Chen, thank you for accepting the interview of Asian Metal. Firstly, please give us a brief introduction about the business of your company.

Chen: Our company mainly engages in the trading of African origin copper, manganese, lead, titanium-niobium raw ores. We have signed supply contracts with overseas miners who supply us with fixed volumes of copper ores per month. Our trading volume for copper concentrate is about 30,000t per year now with the long term target of about 100,000t per year.

Asian Metal: What do you think of the sharp price fluctuation of copper in November 2016 and what’s the main factor for this in your opinion?

Chen: The substantial increase of copper price in the fourth quarter of 2016 was just a short term trend and prices for the material have returned to the normal trend since early 2017. I think the substantial price increase was caused by the supply and demand relationship of copper products.

Asian Metal: How do you think of the demand of copper concentrate in 2017?

Chen: In my opinion, the demand for copper ore will be relatively strong in China especially for high grade copper ore. Thus, we merely import copper raw ore with the grade of about 20%.

Asian Metal: China’s import volume for copper concentrate in February 2017 increased substantially by about 14.9% compared with that in January. Would you like to tell us your opinion about the import volume in March?

Chen: We expect that China’s import volume for copper concentrate in March will increase further because the demand for copper ore is still strong in China and smelters are active in purchasing copper concentrate with no difficulties for suppliers to sell. As a trader for imported copper ore, we are active in importing copper concentrate as downstream customers want to refill stocks. We think that the export ban released by Tanzania on March 2th won’t bring big influences on China’s importing of copper in March.

Asian Metal: What do you think of the influence of the striking in Chile and Peru on copper prices in March?

Chen: Copper is a kind of bulk commodity. The regional striking can’t bring big influences on copper prices in long term and it has difficulties in forming long term supports, which can be seen from the decrease of copper prices recently.

Asian Metal: Treatment charges for imported copper concentrate have been declined since late February with mainstream transaction prices down to USD72-77/t now. Do you think the treatment charges will pick up in the future?

Chen: Affected by the striking of workers in three major overseas mines, treatment charges for imported copper concentrate began to decline from February and caused great concerns. These copper mines have resumed production now and thus treatment charges will pick up in the future rather than stand at low levels in the long run with low possibility to decrease further.

Asian Metal: What’s the plan of your company in the near future? What will you focus on about the trading of copper products?

Chen: Overseas miners supply us with 3,000t of copper ore per month based on the supply contract between us. We plan to raise the monthly volume to 6,000-8,000/t in 2017 and we will also make investments in some targeted mines.

Asian Metal: Can you tell us your opinion about the price trend of copper in the second quarter and the third quarter of 2017 as well as the reason for your predication?

Chen: We expect that copper prices will fluctuate at RMB46,000-48,000/t in the second and third quarter of 2017 with low possibility to reach over RMB50,000/t. We have two reasons about this. On the one hand, stocks for copper cathode can’t be consumed in large volumes currently; on the other hand, the international environment is very tight, which will generally bring some bad influences on copper prices.

Asian Metal: Thank you once again for accepting the interview of Asian Metal and sharing your opinions about the market with us. We wish your company a better future!