Summary of Key Points from Copper Expert Call with SMM Industry Overview - **Industry**: Copper Industry in China - **Date of Call**: October 23, 2025 - **Participants**: Mr. Ye Jianhua, Chief Copper Analyst at SMM Key Takeaways Copper Price Outlook - SMM indicates that the downstream sector is inclined to restock as copper prices in China have decreased to Rmb82-83k/t due to low inventory levels [1][2] - The average copper price is projected to be Rmb83.5-84k/t in 2026E, compared to Rmb80.5k/t in 2025E, which is considered conservative given the downstream pushback [1][2] - Spot prices could potentially reach approximately Rmb90k/t [1][2] Supply and Demand Dynamics - Global copper concentrate output is expected to increase by over 600kt YoY in 2026E [3] - China's copper cathode output is anticipated to rise by 1.3-1.35 million tonnes (mnt) YoY in 2025E and by 600-620kt in 2026E, with limited production cuts expected [3] - Both global copper cathode supply and consumption are projected to grow by 3-3.5% YoY in 2026E, despite tight supply conditions [3] Recycling Copper Policy - Crude copper capacity from scrap is primarily located in Jiangxi and Anhui provinces, affected by regulatory concerns [4] - The output impact from recycling copper products was estimated at 50-60kt in August and 20kt per month in September and October due to policy uncertainties [4] Consumption Trends in China - Copper consumption in China was weak in September and October 2025, particularly in the power segment and home appliances, attributed to high copper prices [5] - Negative YoY growth in copper consumption is expected for September-October 2025 due to a high base in Q4 2024 [5] International Market Dynamics - Overseas copper traders are showing willingness to purchase copper amid concerns over production cuts in international smelting capacity [5] - SMM expects continued shipments of copper to the US market due to the premium of Comex copper prices over LME [7] Additional Insights - The transition from aluminum to copper in power and home appliances is expected to be slow despite high copper prices, due to low fault tolerance [8] - Global copper demand from the data center industry is projected to reach 500-600kt in 2025E, with an increase of 250-300kt YoY in subsequent years [9] Conclusion The copper industry in China is experiencing a complex interplay of price dynamics, supply and demand shifts, and regulatory impacts. The outlook suggests cautious optimism with potential price increases, but challenges remain in consumption and recycling policies.

Core Insights - The copper market is experiencing significant volatility due to tariff disputes, leading to increased competition among buyers for the metal [1] Group 1: Market Dynamics - The scramble among buyers highlights the competitive landscape in the copper market as tariffs impact supply and demand [1] - Tariff-related challenges have intensified the urgency for companies to secure copper, a critical raw material for various industries [1]

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Core Insights - Copper consumption in the U.S. and India is expected to grow significantly over the next decade, moving away from reliance on China as its demand growth slows [1][2] - Analysts predict that while China will remain the largest copper market, other regions will increasingly influence demand and pricing due to changing policies and geopolitical factors [2][3] Demand Trends - China's copper consumption and stockpiling are projected to decline, with a shift back to traditional drivers of copper demand, such as replacement cycles outside of China [3][4] - U.S. copper demand is forecasted to reach 2.2 million tons by 2031, a nearly 50% increase from 2026, while India's demand is expected to exceed 1 million tons, representing over a 30% rise [5] Market Dynamics - By 2031, China is expected to account for 52% of global primary copper consumption, down from 57% in 2026, indicating a shift in market dynamics [5] - The U.S. tariffs on copper pipes and wiring are anticipated to boost local production, potentially leading to a significant loss of market for Chinese copper exports [6][7]

Freeport plans to break away from the benchmark pricing system underpinning global sales of mined copper ores to protect the profitability of smelters, the company’s top commercial executive said in an interview https://t.co/XxFD79XC64 ...

Rob McEwen’s copper venture is moving forward with a major project in Argentina, betting a new legal and fiscal stability program shields it from the latest spate of turmoil in the nation https://t.co/deNUn8CXdr ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Basic Materials, specifically focusing on Copper and Aluminium - **Current Trends**: Fundamentals are stable with an improving outlook for industrial metals driven by macroeconomic factors such as US rate cuts, US dollar weakness, and China's potential stimulus measures due to weak economic data [2][3] Core Insights - **Copper Market**: - Demand normalization post-tariff has not negatively impacted prices as anticipated in Q3 2025 [2] - UBS raised copper price forecasts for 2025 and 2026 by 3% to US$4.37/lb and US$4.80/lb respectively [3] - Expected supply constraints and strong secular growth drivers (e.g., electrification) will support prices in 2026/2027 [3] - **Aluminium Market**: - Demand remains mixed, but supply constraints, particularly from China, are supporting prices [4] - Aluminium price forecasts for 2025 and 2026 were increased by 5% and 2% to US$1.17/lb and US$1.18/lb respectively [4] Earnings and Price Target Adjustments - **Earnings Forecasts**: - Increased earnings forecasts for Zijin, CMOC, and JCC by 4%-5% for 2025 and 5%-9% for 2026 due to higher price expectations for copper, aluminium, and gold [5] - Specific earnings adjustments include: - Zijin: 2025 NPAT raised to Rmb 46,519 million (+4%) and 2026 NPAT to Rmb 57,056 million (+9%) [19] - CMOC: 2025 NPAT raised to Rmb 17,504 million (+5%) and 2026 NPAT to Rmb 19,200 million (+6%) [19] - **Price Target Changes**: - Price targets for key companies were raised, including: - Zijin H: Target increased by 9% to Rmb 35.4 [19] - CMOC H: Target increased by 6% to Rmb 17.5 [19] - Hongqiao: Target increased by 4% to Rmb 28.0 [19] Additional Insights - **Market Dynamics**: - The overall outlook for industrial metals is improving, with a reduced risk of a near-term demand slowdown [2] - Potential for restocking in developed markets could support prices as traditional end markets recover [2] - **Investment Recommendations**: - Top picks include Zijin, JCC, Hongqiao, and Tianshan based on revised earnings and price targets [5] Important but Overlooked Content - **Macroeconomic Drivers**: The report emphasizes the importance of macroeconomic themes rather than physical market tightness in supporting metal prices [2] - **Equity Rotation**: There is a noted equity rotation into mining stocks, indicating investor confidence in the sector's recovery [2] This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the current state and outlook of the copper and aluminium markets, along with specific company performance forecasts and investment recommendations.

U.S. Stock Market - U.S. stocks traded mostly lower, with the Dow Jones index falling more than 150 points, down 0.37% to 45,713.02 [1] - The NASDAQ fell 0.03% to 22,341.05, and the S&P 500 dropped 0.14% to 6,605.77 [1] - Energy shares increased by 1.1%, while utilities stocks fell by 0.8% [1] Company Performance - Dave & Buster's Entertainment Inc. reported second-quarter revenue of $557.41 million, missing analyst estimates of $562.78 million [2] - The company reported adjusted earnings of 40 cents per share, falling short of estimates of 92 cents per share [2] Commodity Market - Oil prices increased by 2.2% to $64.70, while gold rose by 0.2% to $3,726.00 [5] - Silver traded up 0.1% to $43.000, and copper fell by 0.1% to $4.7120 [5] European Market - European shares were lower, with the eurozone's STOXX 600 falling 0.86% [6] - Spain's IBEX 35 Index decreased by 1.30%, London's FTSE 100 fell 0.74%, Germany's DAX 40 dipped 1.29%, and France's CAC 40 fell 0.72% [6] Asian Market - Asian markets closed mostly higher, with Japan's Nikkei gaining 0.30% and India's BSE Sensex increasing by 0.73% [7] Notable Stock Movements - Turbo Energy, S.A. shares surged 408% to $13.72 after securing a $53 million contract for energy storage projects in Spain [8] - WEBTOON Entertainment Inc. shares rose 28% to $19.13 following a non-binding agreement with Disney [8] - Jumia Technologies AG shares increased by 22% to $11.90 after an upgrade from RBC Capital [8] - Bionano Genomics, Inc. shares dropped 41% to $1.6398 due to a $10 million public offering announcement [8] - GD Culture Group Limited shares fell 19% to $7.84 after entering a share exchange agreement [8] - Next Technology Holding Inc. shares decreased by 17% to $23.79 after filing for a stock shelf of up to $500 million [8] Economic Indicators - U.S. business inventories increased by 0.2% month-over-month in July, aligning with market estimates [11] - The NAHB/Wells Fargo Housing Market Index remained steady at 32 in September [11] - U.S. industrial production rose by 0.1% in August, exceeding market expectations [11] - U.S. retail sales increased by 0.6% month-over-month in August, surpassing expectations [11] - Export and import prices both rose by 0.3% in August [11]

Summary of Key Points from the Conference Call Industry Overview - The focus of the conference call was on the materials sector in China, specifically steel, coal, copper, and macroeconomic conditions [1] Core Insights - **Impact of Anti-Involution**: The anti-involution policy is expected to have a nuanced impact on the macro level, with larger companies likely to benefit from broader supply consolidation. This consolidation may lead to lower investment and job losses, affecting demand [2] - **Supply Consolidation Journey**: A multi-year supply consolidation is anticipated, with a gradual shift towards consumption. Policymakers are expected to implement the anti-involution campaign at a calibrated pace, particularly in downstream industries [3] - **Steel Production Control**: The National Development and Reform Commission (NDRC) has set production control measures for the steel industry, aiming for flat year-over-year production. In the first seven months of 2025, China's crude steel apparent consumption decreased by 5.9%, while production fell by 3.1% year-over-year [4] - **Market Stabilization Measures**: Overproduction inspections are more about stabilizing the market rather than strict enforcement. The National Energy Administration may intervene if coal prices deviate significantly [5] Company-Specific Insights China Shenhua Energy (1088.HK/601088.SS) - **Production Cost Management**: Shenhua expects the annual unit coal production cost increase to be below the previously guided 6%. The company is implementing measures to optimize production processes and reduce costs [10] - **Asset Injection Update**: Shenhua is undergoing due diligence for a net asset injection close to RMB 100 billion, which includes 13 projects [11] - **Dividend Policy**: The company has increased its dividend payout to 79% in 1H25, up from 73% at the end of 2024, addressing market concerns about maintaining dividends amid large acquisitions [12] - **New Mining Projects**: Construction has begun at Xinjie mines 1 and 2, with production expected to start in 2029 [13] MMG Ltd (1208.HK) - **Nickel Mine Acquisition**: MMG's acquisition of a nickel mine from Anglo American is aimed at long-term profit contributions, with potential for producing battery-grade nickel. The mine is currently cash flow positive despite lower prices [15] - **Production Guidance**: The production guidance for Las Bambas remains unchanged at 400kt, with management cautious about potential disruptions due to the upcoming presidential election in Peru [17] Additional Important Points - **Customer Base Stability**: MMG's customer base is diversified, with 25% in the US, 25% in the EU, and 50% in Asia. The EU market shows a preference for green nickel, which commands a price premium [16] - **Future Growth Opportunities**: MMG is exploring opportunities for further growth, including potential acquisitions of smaller mines near Las Bambas [18] This summary encapsulates the key insights and developments discussed during the conference call, providing a comprehensive overview of the current state and future outlook of the materials sector in China.

Core Points - The Supreme Court's potential ruling on President Trump's tariffs could significantly impact economic forecasts and business planning, particularly if the tariffs are deemed unconstitutional [1][2] - Tariff uncertainty has led to a slowdown in hiring and capital spending across various sectors, with businesses hesitant to commit due to the unpredictable tariff landscape [3] - New tariffs can still be imposed under national security laws, which are not affected by the current ruling, potentially expanding tariffs on industries like semiconductors and pharmaceuticals [4] Economic Impact - If the challenged tariffs remain in place, consumer prices could rise by approximately 1%, leading to reduced spending, although this may not trigger a recession [5] - The global economy is undergoing structural changes as businesses adapt to tariff uncertainties, with a shift towards shorter supply chains and diversified sourcing strategies [6][7] - These adjustments may lead to a slight increase in production costs, impacting consumer prices but not significantly harming the overall economy [10] Business Strategies - Companies are increasingly sourcing materials locally or diversifying their supply chains to mitigate risks associated with tariffs [7][9] - The transition to more localized production and diversified sourcing will take time, but it is expected to gradually reshape global production dynamics [11] - The outcome of the Supreme Court decision will have varying effects on specific companies, necessitating close monitoring by affected business leaders [12]