Copper price down while China’s smelters reduce production
China’s major copper smelters lowered production in June by 3.6% from the previous month due to seasonal maintenance, state-backed research house Antaike said on Monday.
Copper for delivery in September fell 0.5% from Friday’s settlement price, touching $4.321 per pound ($9,506 per tonne) midday Monday on the Comex market in New York.
The 22 smelters in Antaike’s production survey churned out 745,700 tonnes of refined copper cathode last month, which was still up 6.7% year-on-year, as producers including Tongling Nonferrous carried out overhauls.
January-June production from the group came in at 4.61 million tonnes, Antaike said, up 12.4% from a coronavirus-impacted first half of 2020.
Although Chinese producers including Jinchuan Group plan maintenance in July, overall cathode output is set to increase to around 780,000 tonnes during the month as smelters cash in on rising treatment charges and sulphuric acid prices, Antaike said.
Lightning rod
The rapid spread of the highly contagious Delta variant of covid-19 in some emerging markets has raised concerns that the global economic rebound might be derailed, dampening expectations for metals demand.
A possible monetary policy easing in China did not help sentiment in Shanghai because it was viewed as a sign of weakness in the world’s top metals consumer.
“This created a risk-off tone across markets, with copper the lightning rod for these concerns,” said ANZ senior commodity strategist Daniel Hynes.
China has stepped up efforts to rein in runaway metals prices, including selling supplies from state reserves, triggering a drop in steel and copper prices.
