Indonesian smelters restart seen tightening global copper concentrate market

By Adianto Simamora

The restart of copper smelters operated by PT Freeport Indonesia and PT Smelting is expected to tighten the global copper concentrate market this year, according to CRU Group.

Craig Lang, principal of CRU’s Copper Concentrates Service, said renewed downstream demand from Indonesia will likely prevent the market from experiencing its typical seasonal easing.

 “Normally the concentrates market sees pronounced quarterly seasonality reflecting maintenance peaks. But for this year, we expect persistent deficits,” Lang said at a recent CRU market briefing in Jakarta.

He said the deficit is being driven by several new sources of demand, including the Kamoa Kakula direct to blister smelter project in the Democratic Republic of Congo, alongside Indonesian smelter restarts and additional Chinese smelting capacity.

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CRU forecasts the copper concentrate market will remain in deficit in every quarter of this year, marking a departure from previous years when maintenance or temporary shutdowns helped rebalance supply and demand.

Lang said spot treatment and refining charges have fallen sharply since early last year. He also noted a record spread between miner to trader and trader to smelter terms, creating a two tier pricing environment amid intensified competition for concentrate supply.

Indonesia’s export ban on copper concentrates has shifted the country toward refined copper production, with domestic smelters now absorbing feedstock that was previously shipped overseas, Lang added.

Editing by Alexander Ginting