On May 20, copper prices rebounded at the London Metal Exchange (LME), but dropped in China's futures and spot markets. Strong cautious sentiment amid fluctuating prices dampened daily refined copper trading in China, with spot discounts generally persisting.
Chile's state copper commission Cochilco lowered its copper production guidance, with 2026 expected to see a year-on-year decline of 2% to 5.3 million tonnes, and 2027 to experience a 4% recovery to around 5.5 million tonnes. Previous output expectations were 5.6 million tonnes this year and 5.97 million tonnes for 2027, likely weighed down by lower ore grades, maintenance, and other operational constraints. As the largest mined copper production country, Chile's reduced forecast will intensify supply concerns and further support prices.
Regarding copper scrap, the refined-scrap copper price spread has widened recently amid elevated copper prices, but scrap trading and supply stayed relatively limited, due to uncertain industry tax policy adjustments and invoice constraints. Consequently, copper anode smelters' output growth will stay slow, constraining its support for refined copper smelting under tight copper concentrate supply.
Trading in China's copper semis markets diverged on May 20, as the copper rod and copper plate/strip sector saw increasing orders based on rigid demand, while copper tube and copper bar consumption remained weak. End-user demand in China has shown signs of declining facing the upcoming consumption off-season.
