FOCUS: Australia, Peru copper supply gap leaves Chinese smelters short of options

China's ban on Australian mined copper import and a lingering Peruvian mine disruption have gone against its smelting industry's original ambition to produce more copper, Fastmarkets understands.

China has been engaged in an escalating trade row with Australia of late, with Chinese copper smelters and traders verbally ordered to avoid buying Australian copper concentrate in early November 2020.
The ban coincided with a sharp drop off in raw material supply from key producer Peru, the location of China's only major South American copper mining project Las Bambas, which has been beset by on-and-off blockades from disgruntled local groups.
"Everybody has been running their stocks [of concentrate] low for a year and the Las Bambas’ delay has made it worse for Chinese smelters," a trading source said.
Supply constraints had been in place over last year already. Chinese imports of copper concentrates dropped by 1.9% year on year to 21.76 million tonnes in 2020, the first decline since 2011 despite rising domestic demand for concentrate feed.

"The diversion of Australian concentrate has given Japan and South...


Archie Hunter

Julian Luk

January 26, 2021

12:00 GMT

Hong Kong, London