The Outlook For The Copper Concentrate Market - An Inherently Volatile Market will be even more unstable in the Future

The copper concentrate market is becoming increasingly unstable. In the early 1990s large concentrate stocks were built up and the glut was cleared only after treatment charges rose so sharply that 'non-traditional' custom smelter capacity, such as in Kazakhstan, could be employed, By 1994 the market had shifted and Western smelters were unable to secure enough concentrates to operate full out. The reason for these sharp swings in the market balance is that virtllally all the recent mine development has been non-integrated. With different companies developing new mine . and smelter capacity, it is inevitable that the pace of expansion in the two sectors will not be coordinated. For many years the Japanese smelters were the major buyers from the new mm-integrated mines. However, Japanese smelter capacity is unlikely to increase appreciably in the future and this stabilizing influence will be very difficult to replace. This paper will examine the likely concentrate/smelter balance over the next five years and will forecast the likely direction of? treatment charges. It will also touch on the critical variables in assessing the viability of new greenfield custom smelter capacity, such as proximity to concentrate sources, by-product sulfuric acid prices and, most importantly, tariff protection.