Chinese smelters try to swap Australian copper cargoes with buyers in Japan, S Korea

Singapore — Chinese copper smelters are trying to swap their copper concentrate term contract volumes from Australia for material from different origins with Japanese and South Korean buyers, Chinese copper traders said Nov. 9.

The Chinese buyers are worried that Australian copper concentrate will not pass Chinese customs, or they will face high demurrage fees due to the reported restrictions on Australian imports.

This is despite the fact that most Chinese smelters have yet to see official documents deterring them from importing Australian material. Some are said to have been alerted of the situation verbally by China customs officials.

At the same time, Chinese buyers need to honor their term contract commitments so are trying to swap Australian cargoes with Japanese and South Korean participants instead.

"We're trying to sell Australian concentrate to them and buy back concentrate from other origins," one Chinese trader said.

"I have been contacted by many Chinese traders recently looking to sell me Australian copper concentrates," a Japanese trader said.

However, Japanese importers do not currently have an appetite for additional concentrate, as stocks in Japan are already high.

The impacts will be limited in the long term as China mainly imports copper ore and concentrate from South America and Africa. China's imports of copper concentrates from Australia only account for about 5% of the total, traders said.

China's Minister of Foreign Affairs was asked about the import ban by foreign media at a press conference in early November but did not reply directly. Instead, he said Chinese authorities were acting in line with Chinese laws and regulations and international customs practices.

West Australian copper producer Sandfire Resources CEO Karl Simich told S&P Global Market Intelligence on Nov. 4 that his company could easily sell its product to Japan, Taiwan, South Korea and India.