The SHFE/LME price ratio is inverted and the backwardation structure widens, downstream purchase willingness is weak [SMM Yangshan spot copper]

Rio2 Limited has received regulatory approval for the modified Environmental Impact Study (MEIA) covering the expansion of its Condestable underground copper mine in Peru, clearing a key regulatory hurdle for the company’s plans to increase mine throughput. The approval was received on August 21 following a 14-month review process involving environmental regulators, local communities and other stakeholders.​ Under the approved MEIA, Condestable’s permitted processing capacity can increase to 10,000 tonnes per day (tpd) from the current 8,400 tpd, representing an increase of about 19%. Rio2 is currently completing engineering studies for both the processing plant and mine and is targeting a final investment decision in H2 2026. The company said detailed engineering is already underway with third-party consultants.​ The environmental approval also covers a new dry-stack tailings facility, with an initial permitted capacity of approximately 43 million tonnes and a design allowing staged expansion to as much as 170 million tonnes. In addition, the MEIA extends Condestable’s environmentally approved mine life by a further 10 years, providing regulatory support for longer-term operations and potential future expansion.​ Rio2 is also evaluating additional sources of ore to support the operation. An ore-sorting pilot programme targeting existing low-grade stockpiles and waste dumps is scheduled to begin in Q4 2026, while underground and surface exploration continues across the Condestable concessions. A surface geophysical survey covering the entire land package has recently been completed, with results currently under analysis.​ The approval removes an important regulatory constraint on Condestable’s planned expansion, although additional copper supply will depend on Rio2 completing engineering work and proceeding with the investment decision. Raising permitted throughput from 8,400 tpd to 10,000 tpd could support higher copper production over the medium term, while the additional 10 years of environmental approval and expanded tailings capacity strengthen the mine’s longer-term operating outlook.

[SMM Shanghai spot copper] Looking ahead to tomorrow, available spot copper cathode supplies in the Shanghai market remain tight. After some low-priced cargoes were traded in early morning, offers quickly decreased. Suppliers' willingness to hold prices firm and hold back from selling further strengthened. As month-end approaches, some downstream consumers and traders still need to replenish cargoes with invoices dated this month, but supply of such cargoes is relatively limited, widening the invoice gap gradually. Purchase sentiment continued to rebound during the day, reflecting that restocking demand still exists, providing strong support for spot premiums. However, with copper prices and premiums both at high levels, downstream acceptance of high-priced cargoes may gradually decline, and the willingness to chase higher prices could be restrained. On balance, due to tight available supplies, month-end invoice demand, and suppliers' firm hold on prices, Shanghai spot copper prices against the 2609 contract are expected to remain in premium tomorrow, with the overall center likely to hold up well.