Review of major events in the copper market in 2020
1. Zijin Mining sets production targets for the next three years
February 2020: Zijin Mining released the company's work guidance announcement for the next three years: It is planned that by 2022, the company's core business of mineral gold, mineral copper, and mineral zinc production ranges from 49-54 tons, 670-74 million tons, 38 -420,000 tons, the company's product output and performance will usher in "explosive" growth, of which the annual compound growth rate of mineral copper will reach 22%-26%.
2. China Minmetals suspends shipments from Las Bambas Copper Mine
February 4, 2020: Minmetals Resources Co., Ltd. once again stopped the transportation of the Las Bambas copper mine in Peru because members of the local community blocked the road to protest the continued pollution of its land. Minmetals' measures are aimed at protecting trucks entering and leaving the mine, and it has suspended the transportation of concentrate to port facilities, but it is not expected to affect production. Since the increase in production capacity in 2015-16, Las Bambas has been plagued by road blockades and freight suspensions. Las Bambas copper mine is expected to produce 418,000 to 445,000 tons of copper in 2020; it is expected to produce 2 million tons of copper in 2021-2025.
3. Japan's Mitsubishi Materials Company purchased a 30% stake in Chilean copper mine
News on February 10, 2020: Japan's Mitsubishi Materials stated that it has spent US$236 million to acquire 30% of the Mantoford copper mine and related copper mine projects in order to obtain more concentrates for its smelter. The copper mine has 2.1 million tons of copper reserves, and the two companies plan to invest 731 million US dollars to expand the facility and build a refining and processing sulfide ore.
4. Construction of a new copper smelter in Indonesia's Freeport will start in August
News on February 19, 2020: Tony Wenas, CEO of Indonesia Freeport, said that construction of a new copper smelter is expected to begin in August. Wenas said that the pre-engineering and design of the US$3 billion smelter has been completed and site preparation is expected to be completed within three months. Freeport promised to build a smelter before December 21, 2023. The smelter is expected to consume 2 million tons of copper concentrate per year and produce 500,000 to 600,000 tons of copper cathodes. The existing smelter has an annual output of 300,000 tons. The mine's output in 2020 is expected to be 50% of the normal level, that is, 210,000 tons of ore per day, and the output will return to normal in 2022. Spokesperson Riza Pratama said that Indonesian Freeport’s copper concentrate output this year is expected to exceed 1 million tons.
5. The Tariff Commission of the State Council: Certain imports of copper and aluminum can apply for tariff exclusion
February 18, 2020: The Customs Tariff Commission of the State Council issued the "Announcement on Carrying out the Exclusion of Commodities Subject to Tariffs from the United States and Canada". According to the announcement, according to the application of relevant domestic enterprises, import goods purchased from the United States in accordance with the requirements of marketization and commercialization will not be imposed within a certain period of time.
6. Jiangxi Copper intends to subscribe for the shares of Shandong Hengbang to 30.59% for 1.03 billion yuan
February 25, 2020: Jiangxi Copper Corporation announced in Hong Kong that the company intends to subscribe for 88.949 million shares of Shandong Hengbang Smelting Co., Ltd. at a consideration of RMB 1.03 billion. As of the date of this announcement, the company owns 29.99% of Shandong Hengbang. After the settlement, the company will hold 30.59% of the total issued shares of Shandong Hengbang.
7. San Diego & Shanghai Cesco Copper Annual Meeting Cancelled! Due to the Coronavirus Outbreak
News from March 3, 2020: The San Diego Cesco annual meeting has been confirmed to be cancelled. The event was originally planned to be held from March 23 to 25. On March 2, the organizer confirmed by phone that: "The World Copper Conference and Cesco Dinner will not be held this year."
8. The Zambian government plans to revoke the Glencore Mopani copper mine license
News, April 16, 2020: The Zambian government plans to revoke the mining license of Glencore's subsidiary Mopani Copper Mine (MCM) because the company did not give sufficient notice before suspending mining operations during the coronavirus crisis and other issues. Glencore has seven days to refute.
9. Yunnan Government: Support key enterprises to carry out commercial purchase and storage of non-ferrous metal products
April 26, 2020: In accordance with the principle of “corporate savings, bank loans, financial subsidies, market operation, and self-financing”, the province’s key non-ferrous metal products such as copper, aluminum, lead, zinc, tin, germanium, and indium will be carried out. Commercial shou storage, shou storage total is about 800,000 tons, shou storage time is one year. The funds needed for shou savings are loaned to the bank by the company in the form of product pledge. The provincial finance has allocated 1 billion yuan of special funds to provide partial discounts on bank loans for corporate savings. Among them, 80% discount subsidies are given to shou storage tin, germanium, and indium enterprises; 60% discount subsidies are given to shou storage copper, electrolytic aluminum, lead, and zinc enterprises.
10. Peru authorized the mining industry to resume mining activities from May 2
News on April 30, 2020: The Peruvian government issued a Supreme Decree authorizing the mining industry to resume mining activities from May 2, 2020. According to this decree, mining companies can mine, refine, store and transport minerals and metals, and they can continue project construction. The resumption of operations will be carried out gradually, with the first phase starting in May and ending in August.
11. Jintian Copper was officially listed, with an issue price of RMB 6.55 per share
Jintian Copper was listed on the main board of the Shanghai Stock Exchange on April 23. The company’s stock code is 601609, the issue price is 6.55 yuan per share, the issuance price-earnings ratio is 22.97 times, and the number of issued shares is 242 million shares. Founded in 1986, Jintian Copper is one of the largest copper processing enterprises in China. Its main products include copper processing materials and sintered NdFeB permanent magnet materials, which are widely used in electric power, home appliances, construction, machinery, and electronics. , Automotive, new energy and other industries.
12. Shanghai Futures Exchange adds 3 new copper delivery warehouses
Since May 21, it has been agreed that the 830 Department of the Guangdong Bureau of the State Administration of Grain and Material Reserves will increase the warehouse at No. 123, Chuangqiang Road, Yongning Street, Zengcheng District, Guangzhou City as the designated delivery warehouse storage point for copper futures of our firm, with an approved storage capacity of 20,000 tons;
Since May 21, Guangdong Jushen Warehousing Co., Ltd. has been approved to be located at No. 1 Jintai Road, Danzao Logistics Center, Danzao Town, Nanhai District, Foshan City, Guangdong Province to become the designated delivery warehouse for copper futures of our firm, with an approved storage capacity of 20,000 tons;
Since August 17, it has been agreed that the company’s warehouse at No. 186 Huaian Road, Jiaxing City, Zhejiang Province will become the designated delivery warehouse for copper futures of our firm, with an approved storage capacity of 20,000 tons of copper.
13. Tongling Nonferrous Metals will build the country's largest single-mining copper smelting plant
News on June 17, 2020: The first batch of electrolytic copper products produced by the second-phase electrolysis project of the "Austrian Furnace Renovation Project" of Tongling Nonferrous Jinguan Copper Industry Branch has successfully rolled off the production line. The design capacity is a project with an annual output of 140,000 tons of copper cathode, which will bring 60,000 tons of copper to the enterprise in the year it is put into operation. After reaching the standard and reaching production, the annual output of copper cathode of Jinguan Copper Branch will reach 640,000 tons, becoming the country's largest single-mining copper smelter.
14. Ministry of Ecology and Environment: A total ban on solid waste imports in 2021
June 30, 2020: The Ministry of Ecology and Environment held a regular press conference. Spokesperson Liu Youbin answered questions from reporters on the prohibition of foreign waste imports. He said that in the first five months of this year, the national solid waste import volume was 3.226 million tons, a year-on-year decrease of 45.3%; since 2021, the import of solid waste will be completely banned, and the Ministry of Ecology and Environment will no longer accept and approve applications related to the import of solid waste.
15. Lun Copper rose more than 20% in the second quarter, the largest single-quarter increase in the past decade
News from July 1, 2020: Benefited from demand-side improvement, supply-side disorder, and global stimulus. The LME copper futures closed up 1.0% overnight at US$6018.50/ton. US stocks rose to US$6055/ton at the beginning of the market, the highest intraday level since January 23. In the second quarter, it rose approximately 22%, the largest order in the past decade. Quarterly increase. Except for Lun Copper, other base metals rose by 2%-14% in the second quarter.
16. Implementation of national standards for recycled copper and aluminum raw materials
July 1, 2020: The online "media briefing on the implementation of national standards for recycled copper and aluminum materials" organized by China Nonferrous Metals Industry Association was successfully held. Shang Fushan, Vice President of China Nonferrous Metals Industry Association, and Zhao Yongshan, Vice President of National Nonferrous Metals Standardization Technical Committee Secretary General, Ge Lixin, Han Zhiwei, and Wang Jiwei, Vice Chairman and Secretary General of the Recycling Metal Branch attended the meeting. In 2019, the output of the four major types of recycled copper, aluminum, lead and zinc in my country reached 14.37 million tons. Wang Jiwei said that since this year, the Recycling Metals Branch has given full play to its professional advantages and organized the preparation of the "White Paper on the Pretreatment Technology of Recycled Copper and Aluminum Raw Materials" to help domestic and foreign companies better understand the standard technical indicators and requirements. The formulation of the "Administrative Measures for Qualification Accreditation" has been completed, and the accreditation will begin soon.
17. The first batch of copper cathodes produced from oxide ore in the second phase of Wanbao Minerals Kamoa Project
On July 28, 2020, after 406 days of arduous project construction, equipment installation and production commissioning, the oxide ore of the second phase of the Camoya project successfully produced the first batch of copper cathodes, with a designed annual output of 25,000 tons of standard copper cathodes.
18. The Kakula Copper Mine is expected to produce the first batch of copper concentrates within one year
Finhoe Mines announced on September 1 that the underground development of the Kakura Copper Mine continued to advance rapidly. In August, a total of 1,842 meters was excavated. So far, the underground development project of more than 20.6 kilometers has been completed, exceeding the set target by about 6.0 kilometers. The mixed storage yard currently reserves about 483,000 tons of ore, with a copper grade of about 3.76%, including 116,000 tons of high-grade ore (copper grade 6.08%) and 367,000 tons of medium-grade ore (copper grade 3.02%). The Kakura Mine plans to achieve the first batch of concentrate production in the third quarter of 2021. It is expected to become the world's highest grade large-scale copper mine. The initial annual processing capacity is 3.8 million tons. The average copper supply for the first five years after commissioning is estimated The grade is above 6%.
19. Yulong Phase II is expected to start trial production in November
On September 8th, it was stated at the annual promotion meeting of the Western Mining Industry that the second phase of Yulong will start trial production in November. After the second phase is put into operation, the total production capacity will reach 130,000 metal tons/year and it is expected to reach production quickly next year.
20. The import of scrap copper will be officially released from November 1st
On October 20, the Ministry of Ecology and Environment, the General Administration of Customs, the Ministry of Commerce, and the Ministry of Industry and Information Technology issued the "Announcement on Regulating the Import Management of Recycled Brass Raw Materials, Recycled Copper Raw Materials and Recycled Cast Aluminum Alloy Raw Materials". From November 1, 2020, recycled copper that meets the "Recycled Copper Raw Materials" standard will not be a solid waste and can be imported freely!
21. Shanghai International Energy Exchange began trading on international copper futures on November 19
The China Securities Regulatory Commission has approved the Shanghai International Energy Exchange (hereinafter referred to as the Energy Center) to list and trade international copper futures.
International copper futures will be listed and traded on November 19, 2020 (Thursday). The call auction will be held from 08:55-09:00 on that day and the market will open at 09:00.
22. Public announcement of the first batch of standardized enterprises in the copper smelting industry
On December 3, 2020, the Ministry of Industry and Information Technology issued an announcement to announce the first batch of companies that meet the "Copper Smelting Industry Standard Conditions" (Ministry of Industry and Information Technology Announcement No. 35, 2019). The publicity period is from November 30, 2020 to December 11, 2020. The specific list of companies are: Yunnan Copper Southwest Copper Branch, Daye Nonferrous Metals Group Holding Co., Ltd., Northern Copper Co., Ltd., Jilin Zijin Copper Co., Ltd., Zhangjiagang United Copper Co., Ltd., Zhejiang Jiangtong Fuye and Ding Copper Co., Ltd., Ningbo Jintian Nonferrous Metal Materials Co., Ltd., Ningbo Shimao Copper Co., Ltd., Zijin Copper Co., Ltd., Jiangxi Copper Co., Ltd. Guixi Smelter, Liaocheng Yanggu Xiangguang Copper Co., Ltd., Shandong Jinsheng Nonferrous Group Co., Ltd., Henan Zhongyuan Gold Smelter Co., Ltd., Henan Yuguang Gold and Lead Co., Ltd., Guangxi Jinchuan Nonferrous Metal Co., Ltd., Guangxi Nanguo Copper Co., Ltd., Yunnan Tin Co., Ltd., Jinchuan Group Copper Industry Co., Ltd., Qinghai Copper Industry Co., Ltd.
23. Copper prices continued to rise at the end of the year, hitting a new high since 2013
In mid-November, as the dust settled in the U.S. general election, and boosted by vaccine developments to promote market risk appetite and U.S. fiscal stimulus news, copper prices broke through the previous shock range in one fell swoop, showing a continuous rise in the market, setting a record for nearly 7 years. High, and then maintained high shocks until the end of the year.
