Metals: Codelco lowers copper output guidance

Codelco has lowered its 2023 annual production guidance to 1.31mt-1.35mt, from its previous guidance of 1.35mt-1.42mt, as it expects more production halts in the second half of the year. The revised output guidance includes the recent damage at its El Teniente underground mine which is expected to curb production levels. Codelco’s copper output has declined 14% year-on-year to 633kt over the first half of the year, while quarterly output also declined 17% YoY in 2Q23, primarily due to project delays and accidents at mines.

Weekly data from the Shanghai Futures Exchange (ShFE) shows that inventories for base metals remained mixed over the last week. Copper weekly stocks fell by 16,608 tonnes (-21.3% week-on-week) for a second consecutive week to 61,290 tonnes, while aluminium inventories declined by 2,049 tonnes (-1.8% WoW) to 110,996 tonnes as of Friday. In contrast, weekly exchange inventories for zinc, lead and nickel rose by 7.7%, 20.4% and 13.9%, respectively, at the end of last week.

In steel, US Steel confirmed that it has idled a blast furnace out of three in Slovakia. A blast furnace at US Steel Kosice has been temporarily idled for about 40 days amid seasonally weak demand. The shipments from the facility are expected to be 10kt lower in 3Q23 compared to the previous quarter.

Lastly, the latest CFTC data shows that speculators increased their bullish bets in COMEX copper by 2,803 lots for a second consecutive week over the last reporting week, leaving them with a net long position of 13,502 lots as of last Tuesday.

In precious metals, speculators decreased their bullish bets in COMEX gold by 19,616 (after increasing for three consecutive weeks), to leave them with a net long of 116,291 lots as of the last reporting week.