Cooling rate hike expectations keep copper prices steady overnight [SMM Copper Morning Comment]

SMM Morning Meeting Minutes: LME copper: opened at $14,426/mt, hit a high of $14,483/mt, a low of $14,399.5/mt, and closed at $14,425.5/mt, down 0.36%. Trading volume was 17,000 lots, with open interest at 258,000 lots, a decrease of 1,360 lots from the previous trading day, reflecting long liquidation. The most-traded SHFE copper 2611 contract: opened at 109,280 yuan/mt, hit a high of 109,790 yuan/mt, a low of 109,280 yuan/mt, and closed at 109,420 yuan/mt, up 0.11%. Trading volume was 23,000 lots, with open interest at 184,000 lots, a decrease of 975 lots from the previous trading day, reflecting long liquidation.

The EU Council gave final approval on September 24 to temporary trade measures expected to make about 80% of Armenian exports to the bloc duty-free. The annex covers CN 7202 ferro-alloys and CN 2825 other metal oxides, bringing qualifying Armenian ferromolybdenum and molybdenum oxide within scope. SMM learned that European inquiries and procurement demand for Armenian ferromolybdenum increased today as the market priced in the expected tariff relief, potentially improving the material’s competitiveness. As of September 30, the regulation was still awaiting signature and publication in the EU Official Journal. It will enter into force the following day and apply for two years, meaning the current demand pickup mainly reflects advance positioning ahead of implementation.

China's refined copper production growth is expected to slow sharply in 2026 as smelters face tightening copper concentrate and scrap availability alongside weaker sulphuric acid prices, according to foreign media reports. Wood Mackenzie and Zijin Tianfeng Futures expect China's refined copper output to increase by around 3–3.4% in 2026, compared with growth of 10.4% in 2025. Reuters said this would represent the slowest annual growth rate since at least 2000 based on its review of official production data. Refined copper output growth stood at approximately 4% year on year during January-August.​ The slowdown is expected to become more pronounced in the fourth quarter as tighter scrap copper supply adds to the existing shortage of copper concentrate. Reuters reported that a tax crackdown is expected to reduce scrap availability, further limiting smelters' ability to substitute secondary raw materials for concentrate when feedstock conditions tighten.​ Smelter economics have also come under pressure from lower sulphuric acid prices. Sulphuric acid, a major by-product of copper smelting, had previously helped offset extremely low copper concentrate treatment charges. According to Oilchem data cited by Reuters, Chinese sulphuric acid prices declined by around 11% during September.​ Seven Chinese copper smelters are reportedly planning equipment maintenance lasting between 30 and 60 days during October and November. Analysts at Zhuochuang estimate that the planned maintenance could reduce refined copper supply by approximately 80,000 mt.​ The concentrate shortage reflects a broader imbalance between rapidly expanding global smelting capacity and comparatively slower growth in mined copper supply. Recent temporary disruptions at major copper mines including Escondida, Las Bambas and El Teniente have added further pressure to concentrate availability.​ Slower refined copper production growth in China could reduce refined copper supply growth during the fourth quarter, particularly if planned smelter maintenance coincides with continued constraints in concentrate and scrap availability. The simultaneous decline in sulphuric acid prices is also weakening an important source of smelter revenue at a time when treatment charges remain under pressure. Attention will therefore remain on concentrate availability, scrap supply conditions and the scale of planned smelter maintenance during October and November.