US Political Standoff and Economic Implications - A draft White House memo indicates that furloughed federal workers may not receive back pay after the current government shutdown, potentially affecting up to 750,000 federal employees [3] - The Trump administration is considering an additional $12 billion in cuts to clean energy funding, adding to previous cuts of $7.56 billion, totaling nearly $24 billion since May [4] Monetary Policy and Currency Movements - The Reserve Bank of New Zealand unexpectedly cut its Official Cash Rate by 50 basis points to 2.50%, following a total of 300 basis points in reductions since August 2024, impacting the AUD/NZD currency pair [5] - The yield on the 20-year Japanese Government Bond climbed to 2.7%, the highest since 1999, driven by expectations of expansionary fiscal policies under the new Prime Minister [6] Asian Markets and Tech Sector Volatility - Major Chinese tech firms like Alibaba and Baidu saw shares fall by 3% and 4.5% respectively, contributing to a nearly 2% drop in the Hang Seng Tech Index, influenced by global uncertainties and US-China trade tensions [9] Corporate and Commodity News - Glencore is set to receive A$600 million ($395 million USD) from the Australian government to keep its Mount Isa copper smelter operational for three more years, amid rising costs and competition [10] - OpenAI is expanding its data-center capacity globally, with significant investments in AMD chips and a $100 billion investment from Nvidia for data center capacity [11] - Indonesia is considering a new mandate for 10% bioethanol-blended fuel for gasoline, supported by the state energy firm Pertamina, to enhance energy self-sufficiency [12]

Core Viewpoint - China, the largest copper smelter globally, is considering regulatory measures to control the expansion of smelting capacity due to record low processing fees impacting profits [1][3]. Industry Challenges - The processing fees paid by miners to smelters have been adversely affected by "involution-style" competition, leading to self-destructive market conditions [2]. - The rapid expansion of smelting capacity has outstripped mined supply, resulting in tighter availability of copper concentrate [2]. Proposed Measures - The China Nonferrous Metals Industry Association has suggested specific measures to strictly regulate the expansion of copper smelting capacity to mitigate the negative impacts of intense competition [3]. Market Response - Despite a decrease in copper output by 2.5% in July compared to June, copper prices remained relatively stable, indicating a lack of significant market response [4]. - Some Chinese smelters have agreed to process copper from Antofagasta without charge due to the low processing fees, which have reached an all-time low [4]. Supply Concerns - The risk of reduced supplies for Chinese smelters has increased following Freeport-McMoRan Inc's cut in output forecast for Indonesia, which has led to a rise in copper prices [5]. - Benchmark copper prices on the London Metal Exchange rose by 1.02% to $10,442 per metric ton, reflecting market reactions to supply concerns [5].