Copper Climbs 2.87% as China's Sulphuric Acid Ban Bites Chilean Smelters

The Catalyst Just Turned On

COPPER's 2.87% move is the front edge of a weekly tape that lit up the moment China's sulphuric acid export ban went live on May 1. Beijing produces over 40% of the world's sulphuric acid, and the suspension covers both ordinary industrial acid and by-product acid from metal smelting, running through at least December. The measure pulls roughly 3 million tonnes off the seaborne market at the precise moment the Iran war has gutted Middle Eastern sulphur shipments — the feedstock for the acid in the first place. Chile, which alone imports more than a million tonnes of Chinese acid a year, runs much of its oxide-copper leaching circuit on it. There is no quick substitute, and the SX-EW operations that supply close to a quarter of global mined copper cannot run dry without the price showing it.

Why the Supply Math Was Already Broken

The acid story is stacking on top of a ledger that was already tilting. Freeport-McMoRan's Grasberg mine — the world's second largest — has been under force majeure since a fatal September 2025 mudslide, with 2026 copper output now guided roughly 35% below prior plan. Benchmark Mineral Intelligence has revised the 2026 refined deficit to 400,000 tonnes from a pre-Grasberg 72,000. The smelter side is loudest of all: the 2026 annual TC/RC benchmark settled at $0 per tonne, meaning concentrate is now so tight that processors are taking metal at zero treatment margin just to keep furnaces hot. The acid ban tightens the one upstream link that wasn't already snapping.

What's Priced and What Isn't

At $6.40 per pound the HIP-3 perp sits roughly 8% below the January all-time high in COMEX terms, and Friday's >3% weekly gain came with no new demand print — this is pure supply-side repricing. The structural bid behind the chart is still there: J.P. Morgan models 2026 data-center copper demand at 475,000 tonnes, up 110,000 from 2025, on top of an electrification backlog that doesn't blink at price. The counter-case is Goldman Sachs, which expects H2 2026 prices to ease as Grasberg recovers and Chinese demand cools — a view that depends entirely on the ban being short-lived. Funding on the HIP-3 perp is the cleanest read on which side the market is leaning while that question is open.