Investment Rating - The industry investment rating is "Positive" with expectations for overall sector returns to outperform the benchmark index by more than 10% [7]. Core Viewpoints - The report highlights that copper smelters are facing significant losses, with long-term contracts dropping to 80 per ton in 2024. Current spot processing fees have reached -$15.6 per ton, indicating a deteriorating profit situation for smelters [4][15]. - The report anticipates that overseas smelters may reduce production first, as evidenced by Glencore's PASAR smelter in the Philippines, which has ceased operations. In contrast, domestic smelters in China face challenges in reducing output due to market share concerns and local government incentives to maintain high production levels [5][18]. - The supply of copper ore is expected to remain tight, with a projected global copper mine production increase of only 520,000 tons in 2025, primarily from existing large-scale projects. This limited supply is likely to keep processing fees low and may lead to higher copper prices in the near term [23][26]. Summary by Sections Production and Supply Dynamics - The report indicates that the production capacity planned for Chinese smelters in 2025 is 1.1 million tons, mainly concentrated in the second half of the year. The Ministry of Industry and Information Technology's new plan suggests that new copper smelting projects will require corresponding copper concentrate, which may slow down new capacity additions after 2026 [28]. - The report also notes that the global copper mine production is expected to increase by 256 million tons from 2026 to 2030, with significant contributions from existing projects [23]. Profitability and Market Conditions - The profitability of smelters is heavily reliant on by-product prices such as sulfuric acid and precious metals, as the primary processing fees are currently negative. The report emphasizes that smelters are likely to face continued financial pressure unless there is a significant recovery in copper prices [4][15]. - The report suggests that if the supply of copper ore becomes critically low, smelters may be forced to halt operations, particularly smaller ones that lack the resources to sustain production under current market conditions [22]. Future Outlook - The report projects that the copper price may trend upwards due to supply-side disruptions and the anticipated tightness in raw material supply in the latter half of 2025. The expectation is that the processing fees will remain low for at least the next two years [26][28]. - The report also highlights that the copper industry is undergoing a transition, with new policies aimed at high-quality development potentially impacting future production capacities and market dynamics [28].
减产风云再现，今年铜冶炼厂会减产吗？
五矿证券·2025-03-17 11:15