Operating Rate at Chinese Electric Wire & Cable Manufacturers to Rise Further in May, SMM Survey

[Deep Seismic Risks Emerge, Codelco Suspends Andes Norte Expansion Project at El Teniente Copper Mine] Codelco temporarily suspended development and construction activities at the Andes Norte project of the El Teniente copper mine due to potential new-type seismic risks emerging in deep areas, while other production areas of the mine remain in operation. The company will further strengthen seismic monitoring and technical assessment and has not yet announced a resumption time. Andes Norte is an important project for the deep resource succession of El Teniente. This suspension may increase uncertainty over the mine’s medium and long-term production recovery and the commissioning of deep projects.

[SMM Imported Copper Market] Recently, China’s import parity inversion has been notable, and the backwardation structure of near-term LME contracts has widened. Sellers in the imported copper market have become more active in offering, and coupled with mediocre downstream consumption demand, spot premiums have shown a trend of retreating from highs. However, as the siphon effect from North America persists, imported copper supply replenishment is expected to remain limited in China, keeping spot premiums supported on the downside. In addition, some smelters have export expectations, so China’s subsequent export situation needs to be closely monitored.

[SMM Shanghai Spot Copper] Looking ahead to tomorrow, today the SHFE copper price center rose further above 107,000 yuan/mt. High copper prices significantly dampened downstream purchases, and the market was still dominated by rigid demand buying. However, suppliers’ willingness to sell strengthened, and they continuously lowered their offers throughout the day to facilitate deals. As standard-quality copper prices pulled back, downstream purchase willingness improved, and some low-priced cargoes were traded gradually. Meanwhile, available cargoes of high-quality copper and registered SX-EW copper remained scarce, with relatively firm offers providing some support to spot premiums. Overall, against the backdrop of high copper prices suppressing demand and active price cuts by suppliers to sell, Shanghai spot copper prices against the SHFE 2608 contract are expected to remain at a premium tomorrow. The overall center may continue to be in the doldrums, but improved transactions at low prices may limit the extent of further pullbacks in premiums.