China's Refined Copper Output Set to Suffer as Raw Material Shortages Bite
Copper prices have been rising in both futures and spot markets due to tighter fundamentals. In China, refined copper output is expected to be affected by raw material shortages, with losses likely to worsen during the upcoming Mid-Autumn Festival and National Day holidays. According to Mysteel's survey, a smelter in Southeast China has announced maintenance from October to December, which will cut production by 50%, impacting around 52,000 tonnes of output. Seven other smelters are expected to undergo maintenance in October, marking the start of a concentrated maintenance period.
Monthly production losses due to raw material shortages averaged approximately 35,000 tonnes in the third quarter and are expected to reach 45,000 tonnes or even higher in the fourth quarter. The refined copper spot trading in China has been slightly increasing, supported by downstream raw material stockpiling. However, elevated prices may suppress demand performance.
Refined copper spot inventory continued falling due to constrained domestic and imported arrivals and improving consumption. Trading in China's copper semis markets saw a slight improvement on September 21, with end-use stockpiling progressing slowly. Actual demand releases before the holidays and the consumption performance entering the peak season need close attention.