China Copper Market Plagued by Supply Tightness Ahead of National Day Holiday

The copper market in China is experiencing deepening supply tightness ahead of the National Day holiday (October 1-7). Typically, downstream and end-use enterprises stockpile raw materials before the holiday to support production during this period. However, constrained refined copper output and low inventory have driven spot premiums sharply higher, limiting downstream and end-user stockpiling.

Survey results from Mysteel show that most smelters will maintain normal production during the holiday but face pressure from raw-material shortages and production cuts. Only four out of 30 surveyed smelters reported that they would be able to maintain normal finished product inventory levels, while the rest have little or no copper inventory.

The refined copper supply tightness is mainly attributed to raw material issues. The imported copper concentrate spot treatment charge (TC) index stood at -$224.63/dmt as of September 24, indicating extremely tight raw material availability and causing severe losses to smelters. Additionally, by-product sulfuric acid prices have been declining, gradually removing an important source of profit support to smelter operations.