The company said that demand in China has been increasing since the second quarter of 2020 and continued to increase into 2021, partly due to continued Chinese government stimulus measures, increased infrastructure spending and improved construction and manufacturing activities.
Demand for refined copper outside China began to recover toward the end of 2020, the company added in its first-quarter earnings report released on Wednesday April 28.
Teck noted continued tightness in the copper concentrate market in the first quarter, with spot treatment and refining charges (TC/RCs) remaining below the annual negotiated contract terms for 2021 of $59.50 per tonne / 5.9 cents per lb, the sixth consecutive year of reductions.
TCs and RCs at copper smelters have rapidly decreased due to the low availability of concentrate and reduced market liquidity resulting in particular from Covid-19-related impacts in South America. They have rebounded slightly recently, however, with Fastmarkets' copper concentrate TC/RC index, cif Asia Pacific calculated at $24.50 per tonne / 2.45 cents per lb on Friday April 23, up from $23.50 / 2.35 cents the week prior.
“Mine disruptions to date in 2021 are continuing at similar levels to 2020. Spot TCs continued to decline through the first quarter reaching levels not seen since 2010,” Teck said.
“South American mine production improved slightly in the first quarter over the previous year, however monthly production levels remain below previous year averages. While supply constraints due to the effects of Covid-19 improved at a number of mining operations in the first quarter, total production decreased from South America,” it added.
According to Teck, Chile reported a 2.8% decrease in production in the first two months, continuing eight consecutive months of year-on-year declines in production, while Peruvian mine production fell 3.9% in the first two months of the quarter compared to year-ago levels.
Demand for refined copper in China has now surpassed levels seen prior to the Covid-19 pandemic, according to Vancouver, Canada-based Teck Resources.