On June 12th, Bloomberg reported that Teck Resources and Sumitomo Metal Mining are locked in a dispute over treatment and refining charges (TC/RCs) in a major copper concentrate supply agreement. The disagreement, centered on shipments from Teck’s Quebrada Blanca and Highland Valley mines, has prompted the appointment of lawyers to select an industry expert as an independent referee. The clash highlights cracks in the traditional benchmark pricing system, after Antofagasta’s 2025 deal with Chinese smelters set TC/RCs at $21.25/2.125 cents, far below historical norms. Some Japanese buyers, including Sumitomo, have resisted adopting this benchmark amid sharply falling spot TC/RCs, which have recently turned negative. The situation underscores growing tension between well-funded Chinese smelters and financially pressured Western peers, with some smelters in the Philippines and Namibia already suspending operations.

[SMM Analysis: When It Rains, It Pours - Global Copper Concentrates Supply-Demand Balance After the Earthquake at KK Mine] At the end of May, Chinese smelters and Antofagasta commenced mid-year negotiations. In the first round of negotiations this year, miners had already offered a midpoint price of -US$15 to the smelters. This figure was significantly lower than the US$0/dmt that had circulated in the market in late April. According to SMM, many raw material procurement teams from leading smelters in the CSPT group indicated that the negotiations were fraught with difficulties, and it was exceptionally challenging to secure a favorable figure.

》Check SMM metal quotes, data, and market analysis 》Subscribe to view historical price trends of SMM metal spot cargo On June 13, the SMM Imported Copper Concentrate Index (weekly) was reported at -$44.75/dmt, a decrease of $1.46/dmt from the previous -$43.29/dmt. The pricing coefficient for 20% grade domestic trade ore was 93%-95%. Trading activity in the copper concentrate spot market was sluggish during the week. A trader offered 10,000 mt of clean ore from Peru to a smelter at a price in the mid-to-high -$40s/dmt, with a loading period in July and a QP of M+1/5. A smelter had previously purchased 20,000 mt of Caserones and Centinela copper concentrates from a large trader under an index-linked settlement model, with a loading period in July and a QP of M+1/5. During the week, a trader offered 10,000 mt of bundled clean ore to a smelter at a high -$40s/dmt price, with a loading period in July. The gold payable was fully priced after a deduction of 0.3 for gold content below 1 gram. According to market rumors, a large trader offered copper concentrates to two leading domestic smelters, with a total volume of 300,000 mt of ore (long-term contract + spot cargo) at a price in the mid-to-high -$40s/dmt, with a loading period in H2. According to SMM, most Chinese smelters participating in long-term contract negotiations have not yet received a second-round long-term contract offer from Antofagasta. However, one smelter has already responded with a positive single-digit high offer. Japanese smelters have also not initiated a second-round long-term contract offer. They are adhering to the pricing stance since CESCO at the end of last year, insisting on a long-term contract price of $20/30, otherwise, their production and operation will face losses. Ivanhoe Mines announced its latest 2025 production guidance for copper from the Kamoa-Kakula mine, which is 370,000-420,000 mt in metal content, a decrease of 28% from the 520,000-580,000 mt in metal content guidance released at the beginning of the year, mainly due to the earthquake that previously hit the Kakula copper mine. Sinomine Resource Group announced that due to the rapid expansion of global copper smelting capacity, leading to a shortage of copper concentrate supply, its Tsumeb copper smelter in Namibia has temporarily suspended copper smelting operations. In 2024, Sinomine Resource Group acquired the Tsumeb smelter. This smelter is one of the few facilities globally capable of processing copper concentrates containing arsenic and lead, with an annual processing capacity of 240,000 mt of copper concentrates. The SMM copper concentrate inventory at nine ports was 812,800 mt on June 13, an increase of 65,500 mt from the previous period. The main increase came from Qingdao Port, where copper concentrate inventory increased by 40,000 mt WoW this week. 》Check SMM metal industry chain database

[SMM Analysis:When it rains, it pours: Global copper concentrate supply-demand balance results after KK Mine earthquake ] At the end of May, Chinese smelters started mid-year negotiations with Antofagasta. In the first round of negotiations this year, mining companies have offered smelters a quotation with -$15 , which is far lower than the $0 leaked by the market in late April. According to SMM, many raw material procurement teams from leading smelters in the CSPT group stated that this negotiation is extremely difficult, and it is arduous to strive for a favorable figure.

》Check SMM metal quotes, data, and market analysis 》Subscribe to view historical price trends of SMM metal spot cargo On May 30, the SMM Imported Copper Concentrate Index (weekly) was reported at -$43.56/dmt, an increase of $0.72/dmt from the previous -$44.28/dmt. The pricing coefficient for 20% grade domestic trade ore ranges from 93% to 95%. Despite several Chinese smelters engaging in mid-year negotiations with Antofagasta in Shanghai during the week, it did not hinder the recovery of activity in the copper concentrates spot market. A trader sold 10,000 mt of clean ore with a June shipment period to smelters at a low price of -$40/dmt and another 10,000 mt of high-gold ore with a July shipment period at a mid-to-low price of -$40/dmt, both with a QP of M+1/5. A smelter purchased 10,000 mt of South American clean ore from a trader at a mid-to-low price of -$40/dmt, with a July shipment period and a QP of M+1/5. The gold Payable was subject to a full deduction for content below 0.3g. A trader was offering 20,000 mt of South American clean ore with a July shipment period and a QP of M+1/5, with normal gold and silver Payable terms. Previously, the tender results of Anglo American were announced, with a smelter winning a bid for 10,000 mt of QVC at a mid-range price close to -$40/dmt and a trader winning a bid for 10,000 mt of Los Bronces at a price close to -$90/dmt, both with a QP of M+3 and a shipment period in H2 2025. Following the first round of negotiations by Japanese companies last week, Chinese smelters commenced mid-year negotiations with Antofagasta this week. According to SMM, in the first round of negotiations this year, miners had already offered a price in the mid -$15/dmt range to smelters. This figure was significantly lower than the $0/dmt that had circulated in the market in late April. According to foreign media reports, seismic activity at the Kakula underground mine continued intermittently over the past few days, and underground mining operations were suspended again on May 25, 2025. The earthquake caused fractures in underground water veins, leading to an increase in water inflow at the Kakula underground mine. A detailed drainage plan is currently being formulated, including the procurement of additional pumping equipment to enhance pumping capacity and allow for surface drainage. According to SMM, production activities at Kakula may be affected for up to six months. The KK mine is processing low-grade copper ore piled up in the mining area to maintain normal shipments and has not declared force majeure at this time. SMM's copper concentrates inventory at nine ports was 795,900 mt as of May 30, an increase of 15,600 mt from the previous period. The main increase came from Fangchenggang, where copper concentrates inventory increased by 70,000 mt WoW this week. 》Check SMM metal industry chain database

On the macro front, as China and the US reached a substantive consensus on easing economic and trade tensions in Geneva, the trajectory of the US's trade policies toward major economies has once again fluctuated. Despite the US Secretary of Commerce expressing the intention to finalize agreements with major trading partners before summer, President Trump recently reiterated the possibility of imposing a 50% tariff on the EU, leading to heightened market risk aversion and putting pressure on the US dollar index. The 90-day negotiation window briefly reopened between the US and the EU still faces significant uncertainty. Trump's tax reform bill narrowly passed the House of Representatives, proposing a substantial increase of $4 trillion in the debt ceiling. It is expected that the scale of US debt will expand by an additional $3.3 trillion over the next decade, with the federal debt ratio potentially surging to 125% of GDP, indicating an increasingly aggressive path of fiscal expansion. In terms of monetary policy, although some Fed officials, such as Waller, lean toward initiating interest rate cuts in H2 if tariffs decline, given the frequent changes in trade policies and the potential impact of tariffs on supply chains, the market believes that the Fed is unlikely to take substantive action before July, and the pace of interest rate cuts may be delayed. This week, copper prices fluctuated rangebound as expected, with LME copper trading around $9,550-9,650/mt and SHFE copper trading around 77,700-78,500 yuan/mt. On the fundamental front, Antofagasta conducted negotiations for mid-2025 long-term contracts in Japan last week, with the initial TC offer at -$15/mt. According to market sources, the Japanese side showed low acceptance of this offer, and no specific figures were released during the first round of negotiations in China this week. Mid-week, the incident at the Kamoa-Kakula copper mine in the DRC gradually escalated, with both major shareholders issuing statements announcing the suspension of underground mining operations, with the total impact yet to be assessed. For copper cathode, spot premiums both domestically and internationally declined this week, with no pre-holiday stocking demand evident and social inventory remaining flat overall. The SHFE backwardation structure narrowed for consecutive months, while the LME backwardation structure expanded significantly. Looking ahead to next week, macroeconomic data for May from various countries is set to be released. Affected by tariffs, it is expected that economic data for April-May will show little marginal growth overall, and copper prices are anticipated to remain flat. It is expected that LME copper will fluctuate rangebound between $9,350-9,550/mt next week, while SHFE copper will fluctuate between 77,000-78,000 yuan/mt. On the spot front, as the country gradually enters the off-season for consumption, downstream demand remains weak amid high copper prices. However, the supply of imported copper is also tight, leading to a state of weak balance with both supply and demand decreasing domestically. It is expected that spot premiums will stabilize after a slight drop. Spot prices against the SHFE copper 2506 contract are expected to range from a premium of 80-150 yuan/mt.