China's copper cathode production in July recorded 1.1268 million mt, down 1.59% MoM. Cumulative production from January to July reached 8.148 million mt, up 4.9% YoY, with cumulative growth of 381,000 mt. July's copper cathode production of 1.1268 million mt fell 39,200 mt short of the expected 1.166 million mt, mainly due to difficulty in procuring scrap-derived copper anodes and concentrated maintenance at smelters.
Raw material side, the slight decline in sulphuric acid prices also failed to halt the decline in TC. As of July 31, the SMM Imported Copper Concentrate Index (weekly) had dropped to -$159.37/dmt, down $30.31/dmt from -$124.5/dmt on June 26. July's smelting profit was -328.11 yuan/mt, down 722.95 yuan/mt MoM. Although copper prices have been elevated recently, secondary copper shipments have not remained active. Affected by policies, scrap-derived copper anode procurement remains difficult, and some smelters have seen lower production as a result. July also remained a period of concentrated maintenance, with the impact from maintenance at smelters being particularly evident, leading to the production decline. In August, copper cathode production is expected to be 1.139 million mt, up 1.1% MoM, and cumulative production from January to August is expected to be 9.287 million mt.
August production remains relatively low. First, August still has concentrated maintenance and some enterprises have newly added maintenance plans, magnifying the impact. Second, there is no sign of easing sentiment in secondary copper shipments, and anode procurement remains difficult. Third, while smelters that underwent maintenance in July are gradually resuming production, the recovery of production has been slow due to anode procurement difficulties. It is worth noting that some small smelters are still actively ramping up production, and some enterprises have purchased sufficient anodes to cope with subsequent maintenance, resulting in divergent operating rates across regions.
