June Copper Cathode Output Rose Despite Centralised Maintenance of Smelters

SHANGHAI, Jul 6 (SMM) - China’s copper cathode output stood at 857,000 mt in June, up 4.6% month-on-month and 3.3% year-on-year.

Overall, most smelters were under maintenance in June, but the added output from two smelters in Shandong, which resumed the production earlier, entered the market. Meanwhile, some maintenance plans were repeatedly delayed due to the issues relating to equipment and maintenance personnel, and were now re-scheduled in July or even September and October. As such, domestic copper cathode output returned to the moderate high of more than 860,000 mt in June.

From the perspective of raw materials, the clean ore market was in short supply due to the intensive restocking of smelters and supply-side disturbances in South America, and TC fell below the $75/mt mark. However, based on the recent disclosed benchmark TC, which stood at $76/mt for 2023 after negotiations between Antofagasta and domestic smelters, and $80/mt set by CSPT, the market expects the supply of copper concentrate to be relatively sufficient in the future. At the same time, the prices of sulphuric acid fell slightly due to the decline in the prices of raw materials, but the overall profit of smelters was still considerable despite high cost. In the future, domestic smelters are expected to maintain high output under the backdrop of sufficient raw material supply.

In terms of blister copper, with the rapid decline of copper prices by nearly 10,000 yuan/mt, the supply of copper scrap remained tight, and the blister copper RC continued to fall amid relatively tight supply of imported blister copper, which is relatively unfavourable for smelters with expansion plans in the second half of the year.

Judging from the production schedules in July, most smelters are still under maintenance. Jinchuan and Nanguo have started their maintenance, which has a greater impact on production. Chifeng is also considering advance the maintenance plans, lowering market expect for July output. The other maintenance plans will have little impact on the overall production. Nonetheless, some large factories will resume the production from overhauls, and the overall production will remain high. In August-September, three large expansion plans are expected to be put into production, and domestic copper cathode output is expected to rise steadily.

Domestic copper cathode output in July is estimated at 858,400 mt, up 0.2% MoM and 3.4% YoY.