LME copper closed up 142 US dollars to 9876 US dollars/ton on Friday. It hit a two-day high in the past two days, with a cumulative increase of 4.4% last week.

In terms of internal trading, Shanghai Copper broke through the 80,000 yuan/ton mark at the close on Friday night, a record high since 2006.

According to the news, due to the impact of the March mine accident, the copper production of Chilean National Copper Codelco, the world's largest copper supplier, declined again in April.

According to reports, last month, due to a mine accident, Codelco's Radomiro Tomic mine suspended most mining activities, causing production to drop to its lowest level in 20 years.

The agency gave an overall summary of the factors disturbing copper prices:

1. There is insufficient hydropower in Zambia, requiring the mining industry to reduce electricity demand by 30%. In 2023, Zambia will produce 700,000 tons of copper. The lack of hydropower is essentially a continuation of El Niño. South America has more water and Africa has less water. Since most companies match diesel generators to cope with fluctuations in similar national power grids, the final reduction in production in the Democratic Republic of the Congo and Zambia region of Africa was mainly due to non-mainstream mines, and the final performance of mainstream mines was more of an increase in production costs.

2. The Chilean copper underground mine will be closed for 15 days for maintenance. Previously, the Tomic mine of Chile Copper had already experienced a safety accident due to insufficient maintenance capital expenditure and obsolete equipment, causing employees to go on strike and stop production. This shutdown of production and maintenance is also a continuation of insufficient maintenance capital expenditure, and South American mine operations in the El Niño climate are also under pressure. The Chuquicamata underground mine was put into operation in 2019 and is expected to fill up in 2030. The underground mine production is expected to remain at 190,000 tons in 2024, the same level as in 2023. It is expected that the capacity utilization rate will hardly rise again.

3. Antofagas announced the 24Q1 production situation. The company's 2024Q1 output was 130,000 tons, -11% year-on-year, mainly due to reduced grade and increased ore hardness, as well as mine planning and maintenance and cleaning activities, but maintained the annual copper production guideline of 67-710,000 tons. The main source of Antofagasta's increase was the expansion of Los Pelambres production. However, Los Pelambres production Q1 fell 7% year-on-year due to declining grades, and production at other mines also declined due to declining grades. Although the company is still able to maintain production guidelines, it is expected that with the end of Q2, the company's guidance for the whole year may be lowered.

4. World Copper Conference Santiago CESCO Week. The Global Copper Conference was in agreement with the agency's previous judgment, and copper stocks are at a historically low level. However, the opinion of the Copper Industry Conference differs from the agency's expectations. If Chinese smelters delay the demand for replenishment in order to maintain capacity utilization this year, the copper ore replenishment cycle will arrive next year. The agency previously believed that copper ore replenishment will occur this year, which appears to be a low increase in copper supply throughout this year. This disagreement will determine whether the biggest gap between supply and demand in this round will occur this year or next.

Copper mine-related enterprises:

Luoyang Molybdenum Industry (03993), Zijin Mining (02899), Minmetals Resources (01208), Jiangxi Copper (00358), Jinchuan International (02362).