According to Bloomberg reports, Chinese smelters are taking advantage of the current high world market prices and want to increase their exports, which is likely to have contributed to the recent decline in Copper and Zinc prices, Commerzbank’s Head of FX and Commodity Research Thu Lan Nguyen notes.
Prices stay elevated, pressuring Copper and Zinc
“This makes sense in view of the robust metal production to date and the emerging weakness in domestic demand. We reported on Tuesday that Chinese exports of unwrought Copper and Copper products in the first eight months of this year were already 13% above the previous year’s level.”
“The situation is different for exports of Zinc concentrate. Exports for the same period are almost 20% below the previous year’s level. The last time there were significant exports was in 2022, when smelters outside China were forced to cut production due to the energy price shock.”