SMM

Two weeks have passed since the finalisation of the 2025 copper concentrates long-term contracts, and the long-term contract negotiations in the imported copper market in the Shanghai bonded zone are also in full swing. Following last week's intense discussions, upstream and downstream enterprises have gradually finalised their long-term contracts this week. Based on certain exchanges, SMM has analysed and summarised the current progress and partial results as follows.

Africa is an important source of China's copper cathode imports. From January-October 2024, copper cathode from Africa accounted for over 40% of the total copper cathode imports, nearly half of the total. The EQ long-term contract negotiations in the imported copper market in the Shanghai bonded zone have also commenced first. According to SMM analysis, the 2025 EQ long-term contracts CIF Shanghai are mainly fully fixed, with the center at $0-15/mt and QP as M+1. Overall, this represents a decrease of $5-10 compared to the 2024 long-term contract levels. Additionally, local African copper miners are actively tendering, but the offers vary significantly. FCA mainly includes the following three tiers: ① (-$500) to (-$480)/mt, QP M+3; ② (-$480) to (-$450)/mt, QP M+2; ③ (-$450) to (-400)/mt, QP M+1. However, as some enterprises have not yet started tendering, SMM will continue to monitor subsequent developments.

Regarding registered copper, overseas smelters have made significant progress in signing first-hand long-term contracts this week. The 2025 long-term contract offers are mostly consistent with the 2024 offers (Codelco's first-round offer to Chinese enterprises was $89/mt, QP M+1; LS's first-round offer to Chinese enterprises was $70-80/mt, QP M+0). Buyers aimed to counteroffer with lower prices, but overseas smelters remained firm, ultimately concluding deals at the offered prices. Meanwhile, long-term contract negotiations among traders are also ongoing but progressing relatively slower. It is understood that downstream buyers prefer signing contracts with floating prices, and upstream offers have been adjusted accordingly. Semi-fixed and semi-floating, as well as fully floating models, are present, but they require acceptance of a minimum limit of $35/mt, with some requiring inclusion of domestic B/L without brand restrictions. Floating benchmarks are mostly based on SMM monthly average prices, with an upward adjustment of $3-5. Fixed portions for mixed pyro copper are offered at $60-70/mt. For near-sea cargo, QP is M+1/M+0, while for distant-sea cargo, QP is M+2/M+1.

Overall, first-hand long-term contracts with overseas smelters were mostly signed at the offered prices, while the proportion of floating price contracts among traders has increased, with more flexible and diverse signing methods. The market is still under negotiation. SMM will continue to monitor the progress of the 2025 long-term contract negotiations in the imported copper market in the Shanghai bonded zone.