September Copper Cathode Production Was Hard to Increase

August China copper cathode production reached 1.147 million mt, up 1.79% MoM and down 2.09% YoY; cumulative growth was 356,100 mt. In August, maintenance at some smelters ended or was nearing completion, and production gradually recovered, but anode plate tightness still resulted in a significant impact from maintenance. The August SMM Imported Copper Concentrate Index (weekly) stood at- $182.81/dmt, down $34.53/dmt MoM from July. In August, SMM estimated the smelters' monthly average profit and loss figure (purchasing spot copper concentrates, including by-product revenue) at -2,091.57 yuan/mt. This month, scrap-derived anode remained tight, and scrap-derived copper cathode production also continued to decline. This decline was also the main reason why copper cathode production struggled to rise after the maintenance of ore-based copper cathode.

September China copper cathode production is expected to be revised down beyond expectations, with only 1.139 million mt expected, down 0.67% MoM. In September, unexpected maintenance at smelters will occur, resulting in a downward revision of production. Although some smelters resumed production after maintenance in August, the tightness in ore supply and scrap-derived anode plates remained difficult to ease, continuing to suppress production from returning to high levels. In September, there will still be concentrated maintenance at large smelters, with the impact from maintenance expected to exceed 30,000 mt. Moreover, newly launched enterprises in September will have slow production ramp-ups and will not contribute much growth.

Days of inventories side, August smelters' copper cathode inventory days were only 1.62 days, down 0.44 days MoM. In August, as the copper cathode export window opened, some smelters prepared stock for concentrated exports, leading to a decline in in-factory inventory.