China's Copper Smelting Industry Hit Hard by Record-Low Raw Material Prices

China's copper smelting industry is facing an unprecedented crisis due to low raw material prices. As of September, the imported copper concentrate spot TC index had fallen to a historic low of -*** USD/dmt, with the annual benchmark treatment charge for imported copper concentrate at zero. This has squeezed profits from multiple directions, including declining by-product sulfuric acid prices and shrinking profit contributions.

Some smelters have already signaled cutback intentions in response to the pressure on operating margins. The continued decline in Chinese copper inventories has provided direct support for prices, with SHFE inventories falling by *,*** tonnes to **,*** tonnes as of September *.* Domestic social inventories (excluding bonded zones) dropped by **,*** tonnes to **,*** tonnes.