The Copper Monthly Metals Index (MMI) held at last month’s value of 73 based on November price data.
LME copper prices took a sideways turn during November as uncertainty over the strength of the global economy continued to constrain copper prices.
Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets.
The price continued to trade below $6,000/mt throughout November, averaging a value of $5,877/mt for the month.
SHFE copper prices continued firmly sideways
SHFE copper prices continued to move sideways once again in November, with the trading range continuing to move tightly around the CNY 47,000/mt price level.
Source: MetalMiner analysis of FastMarkets.
Like LME prices, SHFE prices continued to look slightly stronger by remaining higher than values seen a couple of months ago.
China’s increased smelting capacity pushes 2020 TC/RCs lower
China copper smelting capacity will increase by an estimated 900,000 tons this year, according to press reports, plus another 350,000 tons during 2020.
As a result, competition for concentrate drove down treatment charges this year. Therefore, official TC/RCs recently set for 2020 contract negotiations remain lower at $62 per ton for smelting and $0.062 cents/pound for refining.
Demand for copper in China could start to pick up in 2020
China’s manufacturing sector could be rebounding, based on positive PMI readings for November, with both the official and private Caixin/Markit readings coming in higher than expected.
The Caixin/Markit manufacturing index edged up to 51.8, from 51.7 last month.
The official PMI manufacturing reading of 50.2 also crossed 50 this month.
This brings both indexes back into expansionary territory.
Rio Tinto extends Kennecott project through 2032 with $1.5 billion investment
Rio Tinto approved a plan to invest $1.5 billion in its Kennecott copper site in the U.S. The investment will allow mining in a new area of the ore body, which will extend Kennecott operations through 2032. As a result, the company expects to mine close to one million tons of copper from 2026 through 2032.
Kennecott operations presently supply close to 20% of annual U.S. copper production, according to the company.
What this means for industrial buyers
Copper prices moved predominantly sideways of late — with prices generally holding value rather than dropping back, even with slowed Q4 demand growth. Industrial buying organizations need to stay alert for further signs of price increases, in case a pickup in manufacturing impacts prices into the new year.
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Buying organizations seeking more insight into longer-term copper price trends may want to read MetalMiner’s Annual Metal Buying Outlook.
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Actual copper prices and trends
Copper prices showed mixed movements this month, but the majority of prices in the index increased mildly.
U.S. producer copper grade 110 and grade 122 increased by 1.5%, the largest increase this month, both now at $3.47 per pound. U.S. producer copper grade 102 increased 1.4% to $3.69 per pound.
China’s copper bar prices increased by 1.0% to $6,729/mt. China’s primary cash and copper wire prices both increased, by 0.8% and 0.9% respectively, to $6,736/mt and $6,732/mt, respectively. China’s copper #2 price held nearly flat at $5460/mt.
Japan’s primary cash price fell by 1.0% – following last month’s 4.0% jump – now at $6,090/mt.
The LME primary 3-month price stayed relatively flat with a 0.5% increase, now at $5,877/mt.
Korean copper strip fell by 1.9% to $7.92 per kilogram.
Indian copper cash prices fell by 1.8% to $6.06 per kilogram.
