The unrelenting expansion of Chinese copper processing capacity over past few years seems to be the culprit.
Chilean miner Antofagasta Plc has proposed negative charges for contracted supplies to smelters in the second half.
The situation is putting pressure on smelters worldwide, with high-cost facilities facing losses and older European copper smelters at risk, while Japanese plants may be sheltered due to their parent companies' stakes in Chilean mines.
Granted, the plunge in fees is partly due to relatively slow growth in mine output worldwide— coupled with recent mine failures in the DRC ($IVN.TO) and elsewhere— but it’s primarily driven by the rapid increase in Chinese smelting capacity.
China’s refined copper output is set to rise 10% in the first half of this year and nearly 5% for the full year, according to researcher Shanghai Metals Market
See the whole article on Bloomberg here:
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