Copper Inventory in Major Chinese Markets Fell for Four Consecutive Weeks

SMM, September 22: According to foreign media reports on September 21, Vedanta Resources' Zambian subsidiary Konkola Copper Mines (KCM) said its Nchanga copper smelter has resumed operations after more than three months of maintenance and repair work. The smelter was commissioned in 2010 with a construction investment of approximately $350 million and has an annual production capacity of 311,000 mt of copper. The shutdown maintenance was originally planned to last 60 days, but after additional critical repair items were identified during detailed inspections, the maintenance period was extended to 106 days, with renovation costs of approximately $40 million. This also marked the smelter's first major overhaul in eight years. Data from Zambia's Ministry of Mines shows that KCM's copper production in 2025 was 80,200 mt. This maintenance is part of the company's overall equipment modernization strategy, and KCM plans to increase copper production to 300,000 mt/year by 2030. Meanwhile, the Zambian government is pushing to expand the country's copper industry, planning to raise national copper production from 890,300 mt in 2025 to 3 million mt by 2031. Zambia is currently Africa's second-largest copper producer.

SMM learned from the market intelligence team of a major overseas mine operator that above-normal rainfall and severe weather across parts of South America in July and August disrupted production and maintenance schedules at some mines. Regional operations improved in September, but mine supply remained tight. Some copper-molybdenum mines still face post-weather maintenance requirements, which may continue to constrain Chilean by-product molybdenum supply and support elevated overseas molybdenum prices.

Looking ahead to tomorrow, available supply in the Shanghai region is expected to remain tight, and with some downstream processing enterprises still having pre-holiday stockpiling demand, spot premiums continue to receive strong support. Although a small amount of imported copper locked in at favorable SHFE/LME price ratios after the import window opened earlier is gradually arriving, the overall volume is limited, and its supplementary effect on market supply is expected to be relatively modest in the short term, making it difficult to significantly ease the current supply tightness. Therefore, spot premiums are expected to have further room to rise tomorrow. However, copper prices are already at elevated levels, the backwardation between prompt and forward months has widened simultaneously, and spot premiums have climbed rapidly, leading to a notable increase in procurement costs for downstream and end-user enterprises, which may gradually reduce their acceptance of high premiums. If premiums continue to rise rapidly, some downstream buyers may turn to a wait-and-see stance, just-in-time procurement may decrease, and market trading activity may pull back. Market participants are advised to monitor the risk of negative feedback on the demand side amid the combined effects of high copper prices, high backwardation, and high premiums.