Chile's Codelco will terminate a long-term contract to sell copper concentrate to Chinese customers from 2025 and bid to expand the range of products it offers to Chinese customers after assessing its production prospects, according to sources.
Codelco aims to replace specialized copper concentrate trading with other deals that include concentrates and value-added intermediate products such as crude copper and anodes, which are derived from concentrates and can be converted into copper metal or cathodes, the sources said. Due to the uncertainty of being able to meet its contractual obligations, Codelco wants to restructure its sales strategy and agreements and continuously update its contracts in light of current market dynamics.
Some Chinese customers have protested the changes but must accept negotiations for new contracts that include intermediates because they will need Codelco's concentrate amid an expected deficit, the sources said.
Codelco is expected to produce 1.31 million to 1.35 million tons of copper, representing 29 percent of Chile's copper production. The state-owned miner's production slipped to about 1.46 million tonnes last year, its lowest level in about 25 years, due to operational problems, and has fallen further this year.
As smelter capacity increases in Asia and Africa, outstripping mine supply, the global copper concentrate market is expected to experience a severe shortage from 2025 to 2027.
