Copper and zinc markets face supply squeeze amid concentrate shortages

Global base-metal markets are experiencing a supply squeeze, particularly affecting copper and zinc. While recent data indicates a slight moderation in immediate supply stress—evidenced by narrowing cash-to-three-month spreads—physical market conditions remain tight. The shortage of copper concentrate is impacting the entire supply chain, forcing smelters and fabricators to increasingly rely on recycled copper scrap to secure feedstock.

Industry analysis suggests that bringing new primary copper supply online is becoming more difficult due to a significant decline in grassroots exploration funding. While global copper resources remain substantial, the scarcity of concentrate has led to negative treatment charges as smelters compete for available material.

In Zambia, the Kwacha has shown signs of recovery, gaining for three consecutive trading sessions against the US dollar. Despite this recent appreciation, the currency recorded a weekly decline, reflecting ongoing economic pressure.