Copper squeeze
- The London Metal Exchange (LME) is currently experiencing low inventory levels.
- Concerns regarding US tariffs are contributing to elevated inventory levels within the United States.
- Increased scrutiny on Scrap Copper taxation fraud in China is generating demand for new copper.
- A significant premium in physical copper deliveries in China, approximately $100 to $120, is leading to a shortage on the LME as traders transfer inventory to China.
- Speculation of a substantial shortage is creating market apprehension for copper globally.
- A significant number of copper smelters in China have undergone maintenance, leading to supply shortages.
- The proportion of shutdowns attributed to smelter maintenance has increased from 6.3% to 14%.
- High Demand from AI & Chip maker Also Creating panic in copper market.
- Major producer China implemented strict export curbs on sulfuric acid, tightening global supply.
Sulfuric acid is a vital chemical input in copper mining, primarily used to dissolve copper from low-grade oxide ores via heap leaching. It converts copper minerals into dissolved copper sulfate, which is then purified and processed through solvent extraction and electrowinning (SX-EW) to yield high-purity metal. Conversely, copper smelting operations can also produce massive amounts of sulfuric acid as a useful economic byproduct - The cost of acid reagents has escalated significantly, rising from approximately 13% to nearly 20% of total operating expenses within specific oxide-leaching and African Copperbelt operations.
- Numerous remote mining facilities are reporting critically low inventory levels, currently at 30–60 days, which presents a significant risk of mandatory production curtailments.
- Operations engaged in processing high-carbonate copper ores necessitate substantial volumes of acid per tonne of metal produced, thereby eroding profit margins and compelling mining companies to re-evaluate near-term project economics.
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