[SMM Analysis] Copper prices have surged recently. On the surface, the current hot topics in the copper market are focused on the following areas: the widening LME-COMEX price spread, copper concentrate TCs hitting new lows again, the energy crisis in Peru, the repeated fluctuations in the pace of Grasberg's production resumptions, and the substitution effect between copper cathode and copper scrap in China. However, from a deeper perspective, all these events can be understood under a single theme: the growing global emphasis on copper resource security, with the market repricing the entire industry chain.

Given the high reliance of the Copperbelt’s mineral processing and logistics on critical consumables supplied via the Middle East, SMM conducted a 17-day field investigation across the Copperbelt to assess the short-term stability of the copper supply chain and the impact of regional infrastructure bottlenecks, engaging with 25 stakeholders in Zambia and DRC and covering the entire value chain, ranging from mining, smelting, refining to downstream logistics and infrastructure investment.

Driven by recovering risk appetite and China's peak demand season, copper prices both in China and abroad bottomed out since late March. However, as SHFE copper returned to the 100,000 level, the tug-of-war between longs and shorts increased, and futures prices shifted to range-bound consolidation. After the Labour Day holiday, copper prices quickly resumed their upward momentum. Today, prices opened higher with a gap and continued to rise, with SHFE copper just one step away from the record high set at the end of January, while LME copper hit a new closing high. What is fueling such strong confidence behind this rally? Deepening Ore-Side Vulnerability Intensifies Supply Disruption Concerns Since the suspension of First Quantum's Cobre Panama copper mine at the end of 2023, spot TC for copper concentrates in China has been caught in an endless downward spiral. Falling from around $80/dmt at the end of 2023, it largely dropped to single-digit levels and moved sideways in 2024. Entering 2025, it further plunged into negative territory, mainly due to successive production disruptions at world-class copper mines including Ivanhoe Mines' Kakula, Codelco's El Teniente, and Freeport's Grasberg mine in Indonesia. Entering 2026, global major copper ore supply growth remained limited, and the ore tightness showed no improvement. The latest data showed that spot TC for copper concentrates in China had fallen below -$90/dmt. With long-term contract TC at zero and spot TC declines accelerating, domestic smelters' production profits mainly relied on surging sulphuric acid prices and firm by-product prices of gold, silver, and other metals to compensate. It was reported that current sulphuric acid revenue could already cover smelters' procurement costs for copper concentrates and part of the processing costs, enabling domestic smelters to maintain relatively high operating rates, and the ore tightness had not yet notably transmitted to the smelting side. It is worth noting that sulphuric acid is not only a by-product of pyrometallurgy but also a core production material for SX-EW copper. For every 1 mt of copper produced, 5–6 mt of sulphuric acid is consumed. Sulphuric acid costs account for 40%–50% of total SX-EW copper production costs, and SX-EW copper production accounts for approximately 20% of global mine copper production. Since the beginning of this year, sulphuric acid prices surged sharply due to multiple factors, and ex-China sulphuric acid supply was periodically disrupted, raising concerns that copper supply in some countries could be affected. Focusing on the reasons behind the sulphuric acid price surge: on one hand, since the escalation of the Middle East conflict on February 28, shipping through the Strait of Hormuz has been broadly restricted and has recently faced a dual blockade by Iran and the US. Sulphur exports from the Middle East have been impacted, with the DRC and Zambia being the most concentrated SX-EW copper producing regions that are highly dependent on sulphur imports from the Middle East. As sulphur supply has been constrained, sulphuric acid prices have naturally risen in tandem, not only raising local SX-EW copper production costs but also potentially triggering further production cuts if the Strait of Hormuz blockade continues and sulphur disruption risks escalate. On the other hand, to prioritise domestic spring ploughing phosphate fertiliser production and support new energy industry expansion, China has imposed a phased ban on sulphuric acid exports according to industry sources. Chile has a relatively high dependence on Chinese sulphuric acid, with SX-EW copper accounting for around 20% of its output, and the market is also concerned that Chile's SX-EW copper production may be affected. In addition, against the backdrop of an already fragile copper ore supply, frequent news shocks from outside China recently have undoubtedly intensified market concerns. Last week, market rumours suggested that the full restart of Indonesia's Grasberg copper-gold mine, which declared force majeure in September last year, had been delayed by one year, driving SHFE copper sharply higher in the afternoon of 8 May. However, according to the latest update from Freeport-McMoRan, the company still expects Indonesia's Grasberg copper-gold mine to fully resume production by the end of 2027, reaffirming the plan outlined last month and refuting reports that production resumptions could be delayed to 2028. Furthermore, yesterday Peru declared an emergency energy decree due to a natural gas pipeline explosion. Peru's copper production reached 2.63 million mt in metal content last year, ranking third globally. Copper mining and smelting are relatively sensitive to power stability, and the market is concerned that Peru's energy strain may disrupt local copper supply. Overall, China's copper cathode production remains relatively stable, but some major global miners lowered their full-year production guidance in Q1, the ore tightness persists, sulphuric acid supply — a core raw material for ex-China SX-EW copper — is constrained, and there are multiple supply disruption themes on the copper supply side, which can easily boost copper prices once the macro front stabilises. Global Copper Visible Inventory Divergence: China Destocking Provides Support Last year, driven by the US government's threat to impose additional tariffs on imported copper, global copper continued to flow into the US, causing COMEX copper inventories to accumulate continuously while copper inventories in non-US regions remained low, providing sustained support for copper prices. In February this year, the US Supreme Court struck down most of the tariff measures introduced by the Trump administration in 2025. The Trump administration subsequently turned to Section 122 of the Trade Act of 1974 to push new global tariff policies. On 7 May, the US Court of International Trade issued a ruling stating that the legal basis for imposing a 10% global import tariff was invalid. The tug-of-war between US courts and the Trump administration over tariffs has continued recently, but the market has certain expectations that the US may subsequently impose additional tariffs on imported copper. Under such expectations, the price spread between COMEX copper and LME copper has shown a slight strengthening trend recently, meaning copper in LME warehouses still has the potential to flow to the US. Specifically, COMEX copper inventories have continued to rebound since mid-April, rising from around 590,000 mt to the latest 620,000 mt, again hitting a multi-year high. Correspondingly, LME copper inventories pulled back from around 400,000 mt in mid-April, declining to 397,700 mt on 6 May. They have rebounded with fluctuations recently, but overall inventories have not exceeded the over-12-year high set in mid-April. SHFE copper inventories fell for the eighth consecutive week, currently dropping to 181,300 mt, the lowest since the beginning of the year. Data source: Webstock Inc. Overall, on the macro front, there are currently disagreements in US-Iran negotiations, but both sides continue the ceasefire with no recent signs of escalation in conflict. Energy prices pulled back from late April levels, inflation concerns eased somewhat, the US dollar index was in the doldrums, and combined with the AI boom lifting global stock markets, market risk appetite was moderate, providing a fertile ground for copper prices to strengthen. Focusing on copper's own fundamentals, inventories outside China remained elevated, but significant prior destocking of China inventories provided support. The ore tightness was difficult to reverse, and supply-side narratives were abundant, meaning copper prices may still hold up well. However, it is worth noting that the Middle East situation remains the biggest macro variable, and the policy path following the Fed Chairman's power transition also deserves close attention. (Webstock Composite)

[SMM Steel] India’s Shyam Metalics and Energy Limited (SMEL) reported a consolidated net profit of INR 3.19 billion (US$33.76 million) in Q4 FY2025-26, up 45.8% YoY, while revenue increased 26.3% YoY to INR 52.4 billion. The company also approved around US$286 million in capex to expand specialty steel and stainless steel capacities. In addition, SMEL plans to build an 800,000 mt/year specialty wire rod and bar mill in West Bengal by 2029 and expand stainless steel capacity in Odisha from 0.5 million mt/year to 0.6 million mt/year.

The 4th China (Jiangxi) International Nonferrous Metals and Metallurgical Industry Exhibition, 2027 The 4th China (Jiangxi) International Nonferrous Metals and Metallurgical Industry Exhibition in 2027 Date: March 28-30, 2027 Venue: Nanchang Greenland International Expo Center "World Tungsten Capital" "World Copper Capital" "Asia's Lithium Capital" "Rare Earth Kingdom" Concurrent Events: The 4th China (Jiangxi) International Green Mining Exhibition, 2027 The 4th China (Jiangxi) International Foundry, Die Casting, Forging, Heat Treatment and Industrial Furnace Exhibition, 2027 [Jiangxi's Many Firsts] New China's first aircraft, first diesel wheeled tractor, first military sidecar motorcycle, first coastal defense missile, first artificial satellite, and today's C919 large passenger aircraft were all born here. [Industrial Advantages] The nonferrous metals industry is the largest pillar industry of Jiangxi Province. The energy consumption dual controls, dual carbon policies, and the new connotations of high-quality development have put forward new requirements for strengthening and expanding the nonferrous metals industry. Promoting the further healthy, rapid, and orderly development of the nonferrous metals industry and enhancing its core competitiveness is an inevitable requirement for transforming from a province rich in nonferrous metal resources to a province with a strong nonferrous metals industry, and is also an important lever for Jiangxi to achieve carbon peaking by 2030. Leveraging Jiangxi Province's abundant nonferrous mineral resources, Jiangxi's nonferrous metals industry has developed rapidly, with continuously expanding scale and improving standards. It has become Jiangxi's largest pillar industry and is currently a key "trillion-yuan-level" industry being cultivated in Jiangxi. It is the undisputed "ballast stone" of Jiangxi's manufacturing sector. Jiangxi has become an important nonferrous metal ore mining and production site in China. Jiangxi Province enjoys superior metallogenic geological conditions and abundant mineral resources, making it one of China's important bases for nonferrous metals, rare metals, rare earth, and uranium minerals, with a relatively high degree of mineral resource complementarity. Jiangxi's seven major categories of minerals — copper, tungsten, rare earth, uranium, tantalum-niobium, gold, and silver — are known as the "Seven Golden Flowers." According to Jiangxi Province's "2+6+N" Action Plan for High-Quality Leapfrog Industrial Development, the province's nonferrous metals industry plans to achieve a trillion-yuan level in main business revenue. To promote the healthy development of Jiangxi Province's nonferrous metals industry, facilitate foreign economic and trade cooperation, and guide Jiangxi's nonferrous metals industry to align with international standards, the Organizing Committee, after conducting multiple in-depth grassroots surveys and project analyses with government authorities and industry associations, has decided to hold the "4th China (Jiangxi) International Nonferrous Metals and Metallurgical Industry Exhibition, 2027" at the Nanchang Greenland International Expo Center on March 28-30, 2027. We look forward to seeing you there. [ Exhibition Dates ] Registration and Booth Setup: March 26-27, 2027 Opening Ceremony: March 28, 2027, 9:30 Exhibition and Trading: March 28-30, 2027 Dismantling: March 30, 2027, 14:00 [Scope of Exhibits] Non-ferrous Metal Raw Materials: copper, aluminum, magnesium, titanium, zinc, lead, manganese, zirconium, vanadium, nickel, molybdenum, silicon, antimony, tin, chromium, tungsten, tantalum, indium and other non-ferrous metal mineral product raw materials, magnetic materials, rare and rare earth materials, precious metal materials and various alloy materials; Non-ferrous Metal Products: copper products, aluminum products, titanium alloy products, magnesium alloy products, powder metallurgy products, etc.; Metallurgical Equipment and Technology: smelting furnaces and kilns, refining equipment, smelting pumps and valves, conveying equipment, heat exchange equipment, flue gas acid-making equipment, corrosion-resistant equipment, hydrometallurgy, electrolysis equipment, large power rectifier power supplies, electrolytic cells, extraction equipment, surface treatment equipment, etc.; Metal Processing Machine Tools: lathes, milling machines, sawing machines, drilling machines, grinding machines, punch presses, boring machines, machining centers, electrical discharge machines, wire cutting machines, laser processing equipment, etc.; Metal Automation Control Equipment: frequency converters, fieldbuses, industrial computers, instruments and meters, automation control, robots, electronic application systems, weighing instruments and information solutions for equipment manufacturing, etc.; Auxiliary Materials for Metal Production: chemicals, solvents, refractory materials, catalysts, gases, lubricating oils, etc.; Powder Metallurgy: raw materials, equipment, products, 3D printing, polymer powder materials, ceramic powder materials; Casting, Die Casting and Forging: castings, casting equipment, casting materials, casting molds, casting/pouring robots, new casting technology and supporting products, various heat treatment furnaces, industrial furnaces, die castings, die casting molds, die casting machines and peripheral equipment, post-processing equipment for die castings, surface treatment technology and equipment, die casting robots, new die casting technology and supporting products, forgings, flanges and rings, forging equipment and accessories, surface treatment technology and equipment, automation, forging mold manufacturing technology and equipment, forging raw materials. Geological (Mine) Exploration Technology and Equipment: geophysical exploration technology, geochemical exploration technology, aerial survey and remote sensing technology, surveying and mapping technology, geological data processing, mineral product analysis, laboratory instruments and meters. Mining Technology and Equipment: excavation equipment, drilling and rock drilling equipment, loading equipment, transportation equipment (excavators, loaders, underground mining vehicles, mining dump units), hoisting equipment, drilling, construction machinery, etc. [Media Promotion] 65 authoritative financial media outlets including Jiangxi Daily, Jiangxi Television Economic Channel, Dajiang Finance Channel, Jiangxi Net, China Net, China Daily Net, and China Finance Net; 10 major self-media platforms including Sohu, NetEase, and Toutiao; 53 industry-leading professional media outlets including China Mining Net, China Excavator Net, China Foundry Net, China Die Casting Net, China Auto Manufacturing Net, World Aluminum Net, China Nonferrous Metals Net, Nonferrous Metals Information Net, and Metalworking, along with 180 other industry-related professional media outlets; Comprehensive coverage of key words search clients through online search platforms such as Baidu Promotion and 360 Promotion; [Concurrent Events] 2027 China Foundry Technology Innovation Outstanding Contribution Award Ceremony 2027 China Metallurgical Melting and Casting Technology Seminar 2027 China Recycled Metals Industry Chain Integrated Development Forum 2027 China NEV and Auto Body Lightweighting Peak Forum 2027 China Green Mine Development Forum [Exhibition Rules] ★ Standard booth 3m×3m: China enterprises: RMB 9,800 yuan/booth; overseas enterprises: RMB 15,800 yuan/booth; ★ International brand booth (9 ㎡, deluxe decoration) RMB 12,800 yuan/booth; overseas enterprises: RMB 18,800 yuan/booth; ★ Indoor bare space (minimum 36 ㎡): China enterprises: RMB 1,000 yuan/㎡; overseas enterprises: RMB 2,000 yuan/㎡; Booth equipped with: two fluorescent tubes, one waste basket, display boards, header board, one table and two chairs, air conditioning, lighting, security, and cleaning services. Note: Bare space does not include any exhibition facilities. Special decoration management fees and hydropower fees charged by the venue shall be borne by the exhibitors and their special decoration contractors. [Organizing Committee Secretariat] Contact: Song Jia 132-1700-0270 (same on WeChat) Official website: http://www.jxysjs.net

[SMM Rare Earth News Flash] US rare earth producer MP Materials reported Q1 2026 results: Pr-Nd oxide production was 917 mt, up 63% YoY; sales were 1,006 mt, including the first shipment to its newest US client. During the same period, the company produced nearly 13,000 mt of rare earth oxides. The company expects the actual Pr-Nd oxide price in Q2 to be approximately $90/kg, but its public-private partnership with the US Department of National Defense will cover the gap to the $110/kg lowest price. Q1 revenue was $91 million, with losses narrowing to $8 million.