Indonesia wants its local copper miners to build smelters and start processing the raw material locally, to boost the economy and offer higher-value copper products that are crucial for clean energy equipment and grid upgrades.
The top copper miners in Indonesia, Freeport Indonesia, and Amman Mineral, were expected to start copper processing at their respective new smelters in May 2024, and they had export permits for copper concentrate until May 31.
Indonesia’s Trade Ministry has been giving miners export permits to continue exporting copper concentrate until their newly built smelters ramp up production and reach full capacity.
Indonesia has previously planned to impose a ban on exports of copper concentrate beginning on June 01, 2024. But the start of the ban will now be postponed to December 31, 2024, Bloomberg quoted Budi Santoso, director general for foreign trade at the Trade Ministry.
The delay of the start of export restrictions could weigh on sentiment in the copper market, where prices hit a record high this month, topping the US$11,000 per ton mark for the first time ever.
Despite weak fundamentals, especially in China, copper prices have rallied in recent weeks as many traders bet that a supply shortage could materialize soon on the market.
Copper stocks monitored by the Shanghai Futures Exchange continue to rise counter seasonally, hitting 322,000 tons, well above the 130,000 tons seasonal average, Ole Hansen, Head of Commodity Strategy at Saxo Bank said.
“We have argued for some time that the scale of the move higher in copper had become detached from short-term fundamentals,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note.
“Robust Chinese refined copper output, seasonal higher SHFE copper stocks, and negative refined import premiums for China suggest a less supportive market in the near term.”
