Copper Cathode Output Dips in May, June Forecast Slightly Lower Amid Ongoing Smelter Maintenance

Copper cathode production in May was recorded at 1.1694 million mt, down 0.81% MoM and up 2.73% YoY. Cumulative production from January to May was 5.8761 million mt, up 7.66% YoY cumulatively. Raw material side, the copper concentrates index continued to decline this month, having fallen below -$100/dmt, with the current quote at -$108.63/dmt. As sulphur remained relatively tight, smelting-grade sulphuric acid played a supplementary role. Sulphuric acid prices generally trended upward this month, and the spot smelting profit for copper cathode procurement of copper concentrates (including sulphuric acid) in May was still 1,084.04 yuan/mt. Moreover, rising copper prices in May further widened the price difference between primary metal and scrap. Anode plate supply was relatively loose, and some smelters saw higher production compared to the previous month. Maintenance impacts at smelters persisted in May, but newly commissioned smelters ramped up at a moderate pace, and the overall production downward revision in May was limited.

Looking at days of inventories, smelter days of inventories in May were 1.59 days, up 0.65 days from April. As prices rose in May, some smelters slowed their shipments, with some smelters indicating they would reserve a portion of inventory for export when prices were favorable.

Copper cathode production in June is expected to be 1.1684 million mt, down 0.09% MoM. Copper cathode smelters in June remain in a concentrated maintenance period, with the impact continuing to expand. However, one new enterprise is ramping up production in June, and copper cathode enterprises that completed maintenance in May are gradually recovering production. Therefore, June production is expected to only edge down from May.