Concerns Over Soaring Non-Ferrous Metal Prices Due to Copper Production Disruptions Amid COVID-19 Spread in China

Jiangsu Province, China's Largest Copper Production Area... Production and Delivery Issues Arise Due to Lockdown
Beijing International Conference Cancellation and China's Growth Rate Emergency

[Asia Economy Beijing=Special Correspondent Jo Young-shin] As the Delta variant virus, which started at Nanjing Lukou International Airport in Jiangsu Province, China, spreads throughout the country, there are forecasts that prices of raw materials such as copper will surge. Additionally, with the Chinese authorities imposing high-intensity control measures such as travel restrictions, concerns are rising that consumption and domestic demand may suffer significant shocks.

The Chinese state-run Global Times reported on the 5th that strict lockdown measures by Jiangsu Province health authorities are causing disruptions in the production of non-ferrous metals such as copper within the province. The media expressed concerns that this could lead to a sharp rise in prices of non-ferrous metals including copper. Jiangsu Province is known as China’s largest copper production area, with an annual output reaching 4.6 million tons. Copper is the main material for copper foil used in secondary batteries. It is reported that many related companies producing automotive batteries are located in Jiangsu Province.

[Image source=Yonhap News]

An official from a non-ferrous metal producer in Jiangsu Province explained the situation, saying, "Due to the lockdown measures, production issues have arisen for some products, and we are in a situation where production cuts are necessary."

The Global Times, citing experts, diagnosed that although logistics systems such as highways are blocked, causing delays in production and delivery of non-ferrous metal products like copper, this situation is not expected to last long.

Although the National Health Commission of China announced on the 3rd that over 1.7 billion vaccine doses have been administered nationwide, the Delta variant is spreading like wildfire across China. As of the 4th, there are 96 new confirmed COVID-19 cases and 27 asymptomatic infections.

As the situation worsened, Beijing city authorities took high-intensity measures by canceling two international events scheduled for this month: the '2021 World 5G Conference' and the '2021 International Robot Conference.' Wuhan, which reported confirmed cases for the first time in 13 months, implemented extreme measures by locking down 16 residential communities. Other cities are also limiting the number of visitors to parks, tourist sites, shopping centers, and theaters.

Meanwhile, as travel bans and lockdown measures continue across China, overseas investment institutions have forecasted that China’s domestic industries will be hit. Investment bank Nomura lowered its third-quarter economic growth forecast for China from 6.4% to 5.1%, and the full-year growth forecast from 8.9% to 8.2%.