Copper Concentrates (SIC 1021)

Mark Abrams

Mark heads up the trade finance offering at TFG where his team focuses on bringing in alternative structured finance to international trading companies.

Access trade, receivables and supply chain finance

We assist companies to access trade and receivables finance through our relationships with 270+ banks, funds and alternative finance houses.

Get started

Content

Copper concentrates: A comprehensive overview

Copper concentrates are an essential component in the mining industry. They act as a critical intermediary between the extraction of copper ore and its final refinement into usable copper products.

They connect mining sites rich in copper ore to production facilities that refine the ore into pure copper, which is used across many industries.

As the demand for copper continues to rise due to its varied applications, the production and trading of copper concentrates have become crucial elements in international commerce.

Production and global leadership

Countries like Chile, Peru, and China lead the way in copper concentrate production thanks to their abundant copper ore deposits.

The production process begins with mining copper ores, which are then crushed and processed to extract copper in a concentrated form. This form typically contains about 20-30% copper and trace amounts of other valuable metals such as gold and silver.

This high concentration of copper makes the material valuable for further processing in smelting and refining operations.

Properties and composition

Copper concentrates are primarily valued for their copper content. However, the presence of gold and silver, even in minor amounts, can significantly increase their worth.

The quality and specific characteristics of copper concentrates can vary depending on the source ore and the extraction technique employed. This variance requires precise analysis and categorisation to ensure optimal processing in the next stages of metal production.

Uses and industrial applications

Copper concentrates are primarily used in the metallurgical processes of smelting and refining, where they are transformed into pure copper. This refined copper is then used in various manufacturing sectors.

For instance, copper’s excellent conductivity makes it indispensable for producing wires, circuit boards, and microchips in electronics.

Due to its durability and resistance to corrosion, copper is also used in roofing, plumbing, and electrical systems in construction.

Market dynamics

Several factors influence the market for copper concentrates:

Supply and demand: The demand for copper concentrates is primarily driven by their use in the electronics, construction, and automotive industries. The growth in electric vehicle production and renewable energy projects amplifies this demand.
Trade policies and geopolitical tensions: International trade regulations, tariffs, and political instability in major producing countries like Chile and Peru can significantly affect copper concentrates’ availability and cost. Such factors can disrupt supply chains and create market volatility, making the copper market particularly sensitive to changes in these regions’ political and economic landscape.
Environmental regulations: Copper concentrate production is an energy-intensive process with considerable environmental impacts. Environmental regulations can increase production costs and limit output, directly impacting supply levels, copper prices, and market availability.

Price drivers

The global demand for copper influences pricing for copper concentrates, the availability of copper ore, smelting capacity, and environmental regulations.

These factors impact the price by affecting the supply chain efficiency or altering production costs.

Trade and finance

Copper concentrates are traded on the spot market, where transactions are made for immediate delivery at current prices, allowing for quick adaptation to market fluctuations.

They are also subject to forward and futures contracts, where prices are fixed for future delivery to hedge against price volatility.

Financial instruments such as letters of credit and supply chain finance are commonly used to manage the significant values involved in the copper concentrate trade.

Contract specifications

When traded, copper concentrates are priced in US dollars per metric ton and classified under specific Harmonised System (HS) codes to streamline international trade and customs processes.

These codes facilitate the efficient movement of goods across borders and ensure compliance with international trade laws.

Understanding the production processes, market dynamics, and trading practices associated with copper concentrates is essential for stakeholders to effectively navigate the complexities of this vital sector.

What is the SIC Code for Metals Concentrates?

SIC Code

1021

Copper Ore

More information about other metals concentrates

Case Study

TFG facilitated the financing of 100 metric tonnes of copper concentrates transported from a supplier in Chile to a customer in China through a sale and repurchase (repo) agreement. This financing arrangement allowed TFG to initially purchase the copper concentrates, providing the Chilean supplier with immediate liquidity. Subsequently, TFG sold the concentrates to the Chinese customer with an agreement to repurchase at a future date, giving the buyer the flexibility to manage their cash flow efficiently.