continued to decrease for the 5th session

Three-month copper on the London Metal Exchange fell 0.9%.

Three-month copper on the London Metal Exchange (LME) fell 0.9% to $9,305 a tonne, its lowest since April 8.

LME copper is on track for a 5.8% weekly decline, its biggest weekly decline since August 2022.

Copper futures on the US Comex exchange fell 0.9% to $4.23/lb.

A key political meeting this week between top metals consumer China failed to provide any details on further stimulus measures despite weaker-than-expected second-quarter economic growth data.

“I think the market is really bearish on China right now and speculators are taking some money out,” said Tom Price, head of commodity strategy at Panmure Liberum. “The government is trying to move it away from a material-intensive story to a tertiary economy . It’s not a happy place and it’s inherently bearish for commodities.”

A shortage of copper ore this year has forced some smelters in China to cut output and more cuts could come next year as supplies of the raw material are expected to tighten further, industry participants and analysts said.

Refined copper output at China’s top producer is closely watched by investors, betting on a tightening long-term supply as demand for energy conversion technology grows. The December shutdown of First Quantum’s Panama Cobre mine and production cuts elsewhere have constrained the supply of raw materials to smelters.

CRU, a research and consulting firm, predicts a global copper shortage of 1.1 million tonnes of copper concentrate by 2025. This could result in 300,000 tonnes of capacity closures, 640,000 tonnes of reduced smelter demand, reduced utilization rates and around 150,000 tonnes of smelter project delays.

While large smelters that rely on annual purchasing contracts are less affected by the concentrate shortage as they have signed processing and refining fee (TC and RC) agreements at $80/mt and 8 cents/lb for this year’s supply, smaller producers are under pressure to cut output.

In the first half of this year, some small and medium-sized smelters in China cut output, while larger companies Jinchuan cut output at two plants in one month by 10% and 20% respectively, and Baiyin cut output at a smelter by 20-30% in March, CRU said in a June report.

“As the supply shortage gets worse, more smelters will take action to cut output,” said an unnamed official at a mid-sized smelter.

Falling spot TC and expectations of a sharp drop in benchmark prices next year have prompted some smelters to plan output cuts in 2025, according to analysts and market participants.

“With the 2025 TC/RC annual benchmark expected to be uneconomic for most smelters, they will likely have less incentive to operate at high utilization rates,” said CRU analyst Craig Lang.

Baotou Huading Copper Industry Development Co. said at a meeting of top smelters last week that it could cut output by 40% next year. The company has an annual capacity of 30,000 tons of refined copper and 200,000 tons of smelting.

Despite the tightening concentration, China's refined copper output rose 7% in the first half of this year to 6.67 million tonnes, official data showed.

Source: https://kinhtedothi.vn/gia-kim-loai-dong-ngay-22-7-tiep-tuc-giam-phien-thu-5.html