China's Copper Cathode Output Drops in October, Raw Material Supply Tightens

China's copper cathode production in October was 1.0867 million mt, down 3.03% MoM and down 0.45% YoY. Cumulative production reached 11.5022 million mt, with a cumulative YoY growth rate of 3.15%. October production was in line with the earlier forecast of a decline, and the impact from maintenance continued to widen. According to SMM data, 11 smelters were under maintenance in October, with a total impact of 103,200 mt, the highest maintenance impact since the start of data collection.

The main reason for the lower production in October remained tight raw material supply. In October, smelters purchasing spot copper concentrates as raw material for production incurred a monthly loss of 5,714.80 yuan/mt, significantly widening by about 1,581.51 yuan/mt from the previous month. Smelter margins continued to deteriorate in October, and some smelters have already cut production, though the monthly impact remains relatively small for now. This month, secondary copper policy remained tight, with no signs of easing so far.

Looking ahead to November, although new smelter capacity is coming online, its overall contribution to production growth is limited. November production is expected to be 1.0821 million mt, down 0.42% MoM. China's copper cathode production remains at a low level, and TC has yet to stop falling. As sulphuric acid prices decline, the monthly loss for smelters purchasing spot copper concentrates as raw material for production in November may widen to around 6,500 yuan/mt.