Main sea freight index at Baltic Exchange rises further to 978 points

With Zambia's general election scheduled for August 13, the country's mining industry is calling for stronger government support to accelerate copper sector expansion, including incentives for mineral processing, increased greenfield exploration and additional power generation capacity. Africa's second-largest copper producer aims to increase annual copper output to 3 million tonnes, nearly triple current production, to capitalize on rising global demand driven by electric vehicles, power grids and infrastructure development. Benchmark copper prices have climbed more than 40% over the past year to around US$14,000 per tonne. The Zambia Chamber of Mines said tax reforms and improved engagement between government and mining companies have attracted more than US$10 billion of investment since the 2021 election. President Hakainde Hichilema is expected to win re-election, with mining policies likely to remain largely unchanged.

As the six-month standstill under UK takeover rules expires this week, Rio Tinto is not expected to restart merger discussions with Glencore. According to people familiar with management's thinking, CEO Simon Trott remains focused on cost reductions, portfolio optimization and expanding the company's copper business. Rio Tinto evaluated a potential merger with Glencore earlier this year, seeking to combine Glencore's copper assets and marketing business with Rio's mining operations. However, the company concluded that the transaction did not offer sufficient value and ended discussions in early February. Glencore's share price has risen about 33% this year, compared with an 18% gain for Rio Tinto's London-listed shares, making a renewed bid less attractive. Rio Tinto's immediate priority remains unlocking more than US$10 billion through portfolio optimization and asset divestments while pursuing organic copper growth. Mergers and acquisitions may eventually be needed to secure long-term copper growth beyond 2030, a renewed approach to Glencore is not expected in the near term.

SMM Morning Brief: Overnight, LME copper opened at $13,992/mt, dipped to $13,975.5/mt in early trading, then drifted higher to hit a high of $14,150/mt, before eventually settling at $14,148.5/mt, up 0.75%. Trading volume stood at 20,200 lots, and open interest increased to 253,000 lots, up 1,896 lots from the previous trading day, as bulls added positions. Overnight, the most-traded SHFE copper 2609 contract opened at 107,350 yuan/mt, with an intraday high of 107,840 yuan/mt and a low of 107,300 yuan/mt, and settled at 107,770 yuan/mt, up 0.40%. Trading volume was 38,600 lots, while open interest fell to 214,000 lots, down 2,688 lots from the previous trading day, as bears reduced positions.