SMM China Copper Cathode Output Declined by 1.0% MoM and 3.6% YoY to 819,200 mt in May

SHANGHAI, June 7 (SMM) - The overall domestic copper cathode output in May was at a low level due to the intensive maintenance. Although two smelters in Shandong resumed production in May, the production of copper did not resume. However, the output in May was slightly higher than expected as the maintenance of some smelters was delayed to June amid the pandemic and poor transportation. From the perspective of raw materials, Yanggu C&D purchased a large amount of clean ore in the market, resulting in a short-term supply shortage in the spot market. However, TCs were still at a high level of $70/mt as most smelters had sufficient raw material supply in the second and third quarters, and the overall in-plant inventories were high. At the same time, the price of sulphuric acid rebounded to over 900 yuan/mt in the mainstream areas due to the continuous rise of upstream sulphur prices, and the profits of smelters were considerable. In terms of blister copper, due to the domestic intensive maintenance, the market demand for blister copper increased to a certain extent. Meanwhile, the blister copper imports were disturbed by the transportation of Durban port in South Africa. Therefore, the overall supply was tight and the TCs of blister copper continued to decline.

From the perspective of the production schedule in June, Tongling Jinguan, Southeast Copper, Nanguo, etc. gradually conducted the maintenance. Although some smelters recovered from overhauls, most smelters were still in intensive maintenance. The overall demand increase was mainly caused by the production resumption of three major smelters and some other individual smelters. Although the new project of Daye Nonferrous Metals (Yangxin Hongsheng) with 400,000 mt copper cathode was delayed as some equipment failed to arrive in time, domestic output will rise steadily in the second half of the year as the expansion project of Tongling and Fuye were put into operation and three smelters in Shandong resumed production. SMM expects that China's copper cathode output will be 854,200 mt in June, an increase of 4.3% month on month and 3% year on year.