Copper Pipe & Tube Operating Rate Drops to 72.26% in May, Down 8.01% MoM and 9.5% YoY

SMM Morning Meeting Minutes: Overnight, LME copper opened at $13,746/mt, consolidated at highs in early trading, rose to $13,781.5/mt before its center moved lower, then dipped to a low of $13,704/mt, and finally moved sideways to close at $13,759.5/mt, up 1.09%. Trading volume reached 16,000 lots, open interest at 244,000 lots, down 1,039 lots from the previous trading day, reflecting bearish position reduction. Overnight, the most-traded SHFE copper 2609 contract opened at 105,500 yuan/mt, rose to a high of 105,640 yuan/mt in early trading, before its center shifted lower to touch a low of 105,060 yuan/mt. Its center then moved sideways, eventually closing at 105,280 yuan/mt, down 0.31%. Trading volume was 34,000 lots, open interest at 206,000 lots, down 26.83 million lots from the previous trading day, also reflecting bearish position reduction.

Zambia’s mining sector is embarking on a significant expansion phase as major international producers scale up capital expenditure to align with government ambitions of increasing national copper output toward 1 million MT per year. However, according to foreign media reports, industry analysts warn that the country's long-term production targets depend heavily on whether supporting grid and transport infrastructure can expand alongside mine capacity. The primary operational constraint remains electricity availability across the Copperbelt. With over 83% of Zambia's 3,985 MW national power base dependent on hydropower assets like Kafue Gorge and Kariba North, recent drought-driven water level drops have exposed severe energy vulnerabilities across the mining sector. Unscheduled grid fluctuations and emergency load-shedding pose acute operational risks to energy-intensive processing operations, where power interruptions cause severe thermal shock to copper smelter brick linings, resulting in physical equipment damage and prolonged operational shutdowns. To mitigate these disruptions, mining companies are increasingly investing in off-grid renewable energy projects, utility-scale solar PV capacity, and regional power imports. Beyond energy, sustained production growth will require capital investments in rail logistics networks, water infrastructure, and local supplier technical capacity.