CHINESE copper smelters are producing record volumes of refined metal, swelling global stockpiles and threatening to cap the price gains that have driven bullion to all-time highs, according to a report by Bloomberg News on Tuesday.
Output is expected to reach almost 1.2 million tons this month, a 4.6% rise from February and a record high, according to a poll of producers by Shanghai Metals Market. Year-to-date output growth stands at 10%, said Bloomberg.
Smelters have maintained their rapid expansion despite a global ore shortage and a collapse in processing fees, aided by increased scrap availability following January’s speculative price rally, SMM said.
A surge in the price of sulphuric acid, a copper smelting byproduct that last month hit its highest level since at least 2014, has further supported production economics, driven by constraints on Russian sulphur exports and strong fertiliser demand.
Global copper inventories have climbed sharply as buyers baulk at elevated prices. Demand in China, the world’s biggest consumer, has also slowed following the Lunar New Year break.
SMM said output could ease in April and May as smelters undertake scheduled maintenance.
