China Copper Sector Equities: Supply tightness adds fuel to valuation catch-up

This report is HSBC's China copper sector update, arguing that copper remains in a supply-led upcycle. According to SMM, China's imported copper concentrate treatment charge (TC) declined to a record negative USD222/dmt on 18 September, reflecting acute upstream tightness. Chilean production is recovering slower than expected, with 62% of mining output value in areas historically exposed to more frequent extreme rainfall during El Niño, supporting the forecast of broadly flat global mine supply in 2026 and a 428kt refined copper deficit. China's refined copper social inventories are down from 489kt after Chinese New Year to the current 90kt, over an 80% drawdown from the annual peak;