What is the future of China's expanding copper smelters?
China's copper smelting capacity has been increasing since the early 2000s and the country has, by far the largest smelting capacity in the world. With further expansion of China's copper smelting capacity, we expect the ratio of combined TC/RC to copper price is likely to fall in the medium term. More smelters are built in inland region, which will incur high freight cost and face downside risks particularly with a potential oversupply in China's copper smelting industry. On the other hand, with recent development, BBF smelters can be scaled up and some may be built outside China in the future.