Copper rose to a record high on Friday amid a volatile trading session after an hours-long halt on the Chicago Mercantile Exchange disrupted markets. The renewed bullish momentum in copper comes after an upbeat CESCO week event in Shanghai, which reinforced expectations of a supply shortage. Copper’s rally this year has been driven by mine disruptions and distortions in trade flows amid Trump’s tariffs. ING commodities experts Ewa Manthey and Warren Patterson noted that copper has risen by about 27% this year.
Chinese smelters are planning cuts to focus consumption
“China’s major copper smelters have also pledged to jointly reduce copper concentrate consumption as lower processing fees squeeze profit margins. The China Copper Smelters Purchasing Team (CSPT), a group of 13 major smelters, will cut copper concentrate processing rates by more than 10% next year, according to Bloomberg.”
“China’s copper smelters posted a series of record production numbers this year despite a tightening raw materials market and a government crackdown on industrial excess capacity and excessive competition. China’s refined copper production was strong despite lower processing and refining (TC/RC) tariffs.”
“These duties earned by smelters for processing ore into metal have fallen to record levels due to shortages of raw materials amid rapid growth in China’s smelting capacity. Spot duties have fallen to less than $60 per tonne this year. Despite similar pledges made last year, they have not resulted in significant reductions in refined copper production. This year, China produced nearly 10% more refined copper through October.”
